Annual Report 2025

MANAGEMENT DISCUSSION AND ANALYSIS 20 The United Laboratories International Holdings Limited Annual Report 2025 The Company intends to allocate the net proceeds from the placing as follows: (a) approximately 60%, or HK$1,300.9 million, will be used for capital expenditure related to the construction and expansion of the Company’s manufacturing facilities, including the Inner Mongolia plant and the Zhuhai plants, strengthen external collaboration, expand the Company’s international business, as well as other general corporate purposes; and (b) approximately 40%, or HK$867.3 million, will be used for research and development of innovative product candidates, including the clinical trial of UBT251, and other pipelines under development. As at 31 December 2025, proceeds from the placing have been used as: – approximately RMB753.9 million for capital expenditure related to the construction and expansion of the manufacturing facilities, strengthen external collaboration, expand the international business, as well as other general corporate purposes; and – approximately RMB226.0 million for research and development of innovative product candidates and other pipelines under development. The remaining proceeds from the placing are expected to be fully utilised on or before 31 December 2028. Such expected time frame is based on the Board’s best assessment, and is subject to adjustment depending on the Group’s future development, market conditions and prevailing business circumstances. Litigations Reference is made to the Company’s announcements dated 9 August 2019, 14 August 2019 and 9 November 2023 in relation to the investment and cooperation agreement with 恒大地產集團成都有限公司 (Evergrande Real Estate Group (Chengdu) Limited) (“Evergrande (Chengdu)”). The Group applied for the commencement of an action against, among others, Evergrande (Chengdu) on 7 March 2023 in the Guangzhou Intermediate People’s Court for recovery of the outstanding consideration receivables of approximately RMB340 million and relevant damages and received a notice of acceptance on 14 March 2023 (the “Action”). Due to the large number of actions against China Evergrande Group commenced in the Guangzhou Intermediate People’s Court, the Action is handled by the Chengdu Intermediate People’s Court. The Chengdu Intermediate People’s Court heard the case on 6 June 2024 and handed down the judgement dated 28 December 2024 allowing the Group’s claim of approximately RMB136.3 million but rejecting other claims of the Group. The Group appealed to the Sichuan Province Higher People’s Court against the judgement. The Sichuan Province Higher People’s Court heard the case on 21 May 2024. On 27 September 2025, a final judgement was handed down that Evergrande (Chengdu) should pay approximately RMB166.5 million to the Group. As of today, the Group has not received payment from Evergrande (Chengdu). Save for the above, there was no other material litigations during the Year.