Releases 2025 Interim Results

SHENGUAN HOLDINGS (GROUP) LIMITED

神冠控股（集團）有限公司

(Incorporated in the Cayman Islands with limited liability)

（Stock code:00829）

'One Core, Three Wings' Health Strategy Advances Steadily as Quality-Focused Growth Gains Further Momentum

(Hong Kong, 25st August, 2025) Shenguan Holdings Limited ("Shenguan" or the "Company", stock code: 00829.HK), unaudited condensed consolidated interim results of the Company and its subsidiaries (collectively referred to as the "Group") for the six months ended 30 June 2025 (the "Period").

During the Period, the Group recorded revenue of approximately RMB443.9 million, gross profit of approximately RMB51.7 million, and a gross profit margin of approximately 11.7%. The cost of sales included inventory write-offs and provisions of approximately RMB23.1 million. The increase in inventory write-offs and provisions was primarily due to the large-scale product trial production and equipment transformations the Group undertook in previous years to develop new products and expand production capacity. The resulting finished product inventory associated with these new product trial production is still awaiting market absorption. In addition to the increase in inventory write-offs and provisions, as the sales of the six new product series to downstream customers significantly increased, the Group had to implement preferential policies to accelerate sales of legacy process products, which led to a decline in gross profit margin.

Income tax expenses were approximately RMB18.0 million for the Period. Income tax expense for the Period was significantly higher than that for the six months ended 30 June 2024 (the "Prior Period"), mainly due to the adjustments in the Group's overall financial planning between the companies in the PRC and Hong Kong. One of the Hong Kong companies within the Group (the "HK Subsidiary") has already repaid, and plans to repay, part of the interest-bearing loans to another company in the PRC within the Group. The source of repayment funds for the HK Subsidiary came from dividends paid and planned to be paid by one of its PRC subsidiaries, resulting in expenses and provisions for the PRC dividend withholding tax.

In light of the above, the Group recorded loss attributable to owners of the parent for the Period of approximately RMB40.6 million, as compared to profit attributable to owners of the parent for the Prior Period of approximately RMB8.2 million.

During the Period, the Group's focus was on the quality control for the six products of the collagen sausage casings series, namely "fried", "crispy", "fresh", "tender", "bright" and "colorful", while further increasing the proportion of high-end sausage casing products. High-end sausage casing products, including the six series accounted for approximately 40% of the sales in the first half of the year. On the other hand, through technological innovation, equipment upgrades and resources investment, the production processes were optimized. Improvements were made in all aspects from raw material procurement to packaging, and production efficiency was enhanced. In addition, the Group expanded its channels for importing raw materials and increased the number of domestic purchasing points to ensure stable supply. At the same time, the Group implemented standardized management of equipment and spare parts to reduce costs and enhance efficiency, and strengthened food safety and environmental protection.

During the Period, the Group also recorded significant growth in sales in business segments other than collagen sausage casing (polymer collagen medical biomaterials, collagen food products and collagen skincare products), with an increase of approximately 93% as compared to the Prior Period. The Group performed particularly well in the polymer collagen medical biomaterials segment, with significant increases in production volume, sales, and profits. The endotoxin content of the Group's medical collagen raw materials extracted through its proprietary technology was only 0.01EU/ ml, which is better than the FDA's standard of 0.5EU/ml in the USA. The approval information for the Class III medical device product licence for "collagen bone filling biomaterials (artificial bone) (膠原蛋白骨

填充材料（人工骨))" is currently being refined. The "dental medical collagen sponge

(牙科醫用膠原蛋白海綿)" has completed clinical trials and is scheduled to enter the regulatory submission process in the second half of the year. Other research and development projects are also progressing steadily, with all initiatives advancing according to plan.

Looking ahead to the second half of 2025, the continued rollout and steady

implementation of consumption-boosting policies are expected to gradually unleash positive effects, which will in turn drive sustained growth in the demand for China's collagen casings market. As customer acceptance of the six new collagen casing product series progressively increases, the Group will further enhance the applicability of the six new products series,, improve production efficiency, strengthen supporting production capabilities, and advance market expansion initiatives.

For polymer collagen medical biomaterials industry, the Group will continue to promote the production and sales of medical collagen raw materials, accelerate the completion of supplementary information required for the approval of "artificial bone", compile the post-clinical data of "oral medical collagen sponge" and prepare the declaration materials for declaration, and continuously promote the research and development and pre-clinical preparation of other polymer collagen medical biomaterials.

For collagen food products, the Group will continue to expand the marketing and promotion of its products, while adjusting marketing strategies and enlarging sales team to achieve better results. For collagen skincare products, the Group will continue to research and develop new products such as daily skincare and cleansing products to broaden the product chain of "Luxianna", "COLL-FULL", "Collagen Family" and "coll-shine". At the same time, the Group will also enhance advertising campaigns and sales planning to promote both online (e-commerce and micro-commerce) and offline sales.

Finally, the team of the Company will continue to endeavour and speed up the growth of the grand health industry of Shenguan, further broaden the application of collagen technology, and research and develop more products in the collagen industry chain for the market, so as to generate better returns on investment for the shareholders.

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About Shenguan Holdings (Group) Limited

Shenguan Holdings, a manufacturing enterprise specialising in collagen products, is committed to the development of core collagen technologies and is principally engaged in the manufacture and sale of collagen products in China. The Group has further expanded its business to polymer collagen medical biomaterials, food products and skincare products since 2015. The Group is listed on the main board of The Stock Exchangeof Hong Kong Limited.

For further information about Shenguan Holdings, please visit its corporate website: https://http://www.shenguan.com.hk/

This press release is issued on behalf of Shenguan Holdings (Group) Limited by

For further information, please contact: Wonderful Sky Financial Group Ltd. Angie Li & Jason Lai

Tel: (852) 6150 8598 / (852) 9798 0715

Email: po@wsfg.hk