#1WEGO威高 Investor Presentation 2022 Interim Results Announcement August 2022 CONSCIENCE | INTEGRITY | LOYALTY The Leading Total Solutions Provider in the PRC Medical Devices Sector#2Contents P3 Business Highlights Ga P9 Financial Performance P15 Strategic Outlook WEGO威高 1#3WEGO感高 Business Highlights#4Key business updates of 1H2022 Continued growth during the pandemic • Despite the impact of the epidemic, the Company still achieved notable growth In the first half of the year, revenue was RMB6,975 million, marking a y-o-y growth of 12.0%; net profit attributable to the parent was RMB1,459 million, marking a y-o-y growth of 20.6% • • Embracing VBP Seizing emerging the opportunities of national and regional VBP, the Company developed new hospital customers, expanded its market boosted sales, and increased its market share Tapped into the cross-selling and up-selling potential of existing customers to offset the impact of revenue reduction on sales from volume-based procurement Margin improvements Affected by the price reduction from volume- based procurement and changes in product mix, the gross profit margin decreased • Improved operating margins through cutting cost and optimization of selling and administration expenses Strengthened abilities to withstand risks Fa E China's leading medical device conglomerate WEGO威高 • • Continued improvement of product portfolio Continued to expand R&D efforts. In 1H 2022, the Company obtained 55 new patents in China, had 162 patents under application, and received 30 new product registration certificates Continued to optimize the product portfolio through acquisition, cooperation with external parties, and active expansion into new business portfolio . . • Global footprint Established overseas business department based on overseas portfolio to better allocate global resources to organize R&D, production, sales and customer service • Strategically screened and planned global development opportunities, and explore overseas markets through production, marketing, branding, distribution, capital markets, etc. Digitalization strategy Established a digital transformation office to continuously promote the Company's digitalization strategy Operational level: Digitally upgrade the manufacturing industry, reduce production costs, and improve operational efficiency Customer service: Medical information solutions 3#5Business sector update Medical Device Pharma Packaging 50.9% Revenue 35.4% Profit 15.1% Revenue 26.9% Profit Orthopedic Product 15.6% Revenue 26.6% Profit ❖ Achieved 19.0% y-o-y segment revenue growth in the first half of the year ✰ Volume-based procurement of various products in various provinces is actively advancing, the Company is seizing opportunities to rapidly increase sales ❖ Accelerated the progress of R&D, obtained 8 new Class III registration certificates, and continued to enrich the product portfolio Interventional Product ❖ Prefilled syringe revenue grew more than 20%. Industry influence is further enhanced ✰ International logistics complex led to delays in equipment production, but capacity expansion plans remained unaffected as a whole ❖ Sales teams follow up and serve over 90% innovative injection projects in China, capturing the biotech industry opportunity Blood Management The volume-based procurement of joint products has been carried out successively nationwide with sales growing rapidly ❖ Seized the opportunity of volum-based procurement in China, quickly filled in the white space in the hospital market, seized market share, further consolidated the market position in spine segment, and enhanced the all-round market competitiveness of joints, trauma, sports medicine and regenerative medicine Blood Purification (Not consolidated) 11.3% Revenue 5.3% Profit 7.0% Revenue 5.8% Profit Impacted by the supply chain issue, the delivery of some orders of Argon has been delayed, affecting the growth rate, but the situation has gradually recovered Through management improvement and cost optimization, segment profit margin continued to increase Although Argon China's business was affected by the COVID pandemic in Shanghai, it still grew rapidly. By continuous internal resource sharing, its market share in China increased WEGO威高 Through external cooperation and internal R&D, the Company continued to improve the product portfolio in the field of blood collection equipment and consumables Expanded the application scenarios of blood irradiators and promoted the application of the scientific research market Sorted out and strategically planned development opportunities in the blood product supply chain, cell therapy and stem cell fields In the first half of the year, Weigao Blood Purification completed a pre-IPO financing of nearly RMB1.5bn, led by well-known investors by way of capital injection and equity transfer ❖ Submitted a prospectus on the Hong Kong Stock Exchange in June this year 4#6Core competitiveness • Corporate culture, reputation and impact Always follow the corporate culture of conscience, integrity and loyalty to meet clinical needs There is strong demand in the market. The implementation of volume-based procurement has facilitated the efficiency improvement along the industry chain of medical equipment and consumables, which is greatly beneficial for us in boosting market share Solid Manufacturing Foundation Notable advantage in automation, material science, cost control, capacity, quality control, etc., and eligible for volume-based procurement in terms or requirement on both price and quality Continue to enhance the digitalization in manufacturing, and actively strengthen foothold in new materials and technologies to maintain and enhance the competitiveness of manufacturing 83 312 E D Open and inclusive platform Promote the synergy and resource sharing between sectors, stimulating the flexibility and vitality of each sector to the fullest Actively cultivate and develop new business segments, which may become new growth drivers A leading domestic medical device platform Customer and distribution channel resources Create an outstanding marketing system adaptive to domestic market. To improve channel advantages through continuous channel integration Continue to diversify product portfolio through R&D, cooperation with global parties, M&A, and aim to fully utilize the channel advantages WEGO威高 5#7Nationwide advantageous sales and marketing channels Distribution network in China Weigao has established an extensive sales network in China, consisting of 35 sales branches, 48 customer service centers, and 2,955 sales representatives in 226 cities across the country. Xinjiang Tibet Jilin Inner Mongolia Liaoning Hospitals Beijing Tianjin Hebei Shanxi Blood stations Weigao's customers (as of June 30, 2022) Heilongjiang Total number Total number New customers of domestic customers of overseas customers 388 3,503 3,430 414 Ningxia Shandong Qinghai Other medical Gansu 8 Shaanxi Henan Jiangsu 1,109 1,606 units Anhui Shanghai Hubei Distributors 217 3,569 1,917 Sichuan Chongqing Zhejiang Hunan Jiangxi Total 613 8,595 6,953 Guizhou Fujian Taiwan Yunnan Guangdong Guangxi In 1H 2022, revenue from domestic market takes up 79.1% of total revenue, of which East and Central China takes up nearly 50% WEGO威高 Hainan Headquarter 35 sales branches 2,955 sales representatives in 226 cities 2.2% ■East and Central China 7.7% 9.6% ■North China ■Northeast Overseas, 20.9% 9.6% 48.8% Domestic, 79.1% South China Southwest 22.1% Northwest 16#8Strategic global footprint Global resources empowered by China's growth, building up a Weigao business Weigao's overseas development has gone through two stages of product trade and industrial planning, and the next step will be to enter the stage of global production and service. In June 2022, based on the original overseas planning, the Company established a new overseas business department, which will make better use of global resources to organize R&D, production, sales and services. Weigao will strategically sort out and deploy global medical device industry development opportunities and explore overseas markets in an all-round way from the perspectives of production, market, brand, channel, and capital The goal of global layout: 1. Overseas sales target: To complete the global layout, and increase overseas sales to half of the Company's sales in 10 years 2. Chinese market target: To introduce overseas device products into the Chinese market and further improve product portfolio through strategic investment and licensing in WEGO North America center WEGO威高 2022 WEGO WEGO Europe center WEGO 2023 South America center 2023 WEGO Overseas Business Department (Shanghai) 2023 Southeast Asia Regional Center (Singapore) 2022 7#9WEGO感高 1H22 Financial Performance#10Key financials 3 Revenue (RMBmm) Operating profit 1,3,5 (RMBmm) Operating profit margin (%) 12.0% 18.7% 20.5% 19.9% 21.8% 23.5% 24.1% Growth (%) 17.7% 9.5% 2018-2021 CAGR: 14.3% 15.9% 13,152 11,345 10,364 CAGR: 12.0% 8,809 2018 2019 2020 2018-2021 CAGR: 20.3% 2,866 6,230 6,975 2,133 2,255 1,648 2021 1H2021 1H2022 EBITDA margin (%) EBITDA 1,2,3,4 (RMBmm) 31.5% 2018 2019 2020 2021 CAGR: 14.8% 1,463 1,680 1H2021 1H2022 Net profit attributable to Company's shareholders 1,2,3,4 (RMBmm) Net margin (%) 31.3% 29.3% 30.8% 31.8% 30.9% 18.7% 19.4% 19.0% 20.1% 20.9% 21.8% 2018-2021 CAGR: 13.5% 4,051 CAGR: 8.7% 3,247 3,322 2,773 2018-2021 CAGR: 15.5% 2,443 1,982 2,154 1,923 2,030 1,587 CAGR: 15.0% 1,209 1,391 2018 2019 2020 2021 1H2021 1H2022 2018 2019 2020 2021 1H2021 1H2022 WEGO威高 Notes: 1 After deduction of special items such as inventory appreciation due to the acquisition of Argon Medical in 2018 and the one-time transaction fee of the acquisition; 2 After deduction of special item of the one-time debt replacement fee of Argon Medical in 2019; 3 Not including the impact of accounting restatement of business under the same control in 2019 and 2020; 5 Operating profit refers to the total pre-tax profit of each segment 9 The above figures are only for the purpose of reflecting the trend at the operational level of the Company. The specific figures are subject to performance reports#11Revenue and profit breakdown (by business segment) Revenue breakdown 1H2022 % of revenue ■Medical device 50.9% ■ Orthopedic ■Interventional 15.6% 11.3% ■Pharma packaging 15.1% Blood management 7.0% Profit breakdown 1H2022 ■ Medical device % of profit1 35.4% ■ Orthopedic 26.6% ■Interventional 5.3% Pharma packaging 26.9% Blood management 5.8% Revenue by product category (RMBmm) Profit by product category (RMBmm) 1H2022 1H2021 YoY growth (%) 1H2022 1H2021 YoY growth (%) Medical device product 3,553 2,985 19.0% 595 509 16.9% Orthopedic products 1,091 1,084 0.6% 447 432 3.4% Interventional products 786 753 4.4% 89 74 21.0% Pharma packaging products 1,056 958 10.3% 452 356 26.8% Blood management 489 450 8.8% 97 92 5.0% Total 6,975 6,230 12.0% 1,7102 1,4892 14.9% WEGO威高 Note: The calculation of profit breakdown does not include other segment profits of RMB30.6mm; 2 The total includes other segment profits of RMB30.6mm (1H2022) and RMB25.4mm (1H2021), which are not listed separately; Figures are only for the purpose of reflecting the trend at the operational level of the Company. The actual 10 figures are subject to performance reports#12Geographic presence of the business Geographic presence Sales from overseas operations was RMB1,460mm, accounting for 21% of revenue 1H2022 % of revenue ■ China 79.1% ■ US 8.8% ■ EMEA 4.3% ■ Asia 5.4% ■ Others 2.4% 1H2021 % of revenue ■ China 79.1% ■ US 9.3% ■ EMEA 4.1% ■ Asia 5.3% ■ Others 2.2% Revenue by category (RMBmm) Revenue share (%) 1H2022 1H2021 YoY growth (%) 1H2022 1H2021 China 5,515 4,928 12.0% 79.1% 79.1% US 613 577 6.1% 8.8% 9.3% EMEA 300 258 16.1% 4.3% 4.1% Asia 376 330 13.8% 5.4% 5.3% Others 171 137 24.9% 2.4% 2.2% Total 6,975 6,230 12.0% 100.0% 100.0% WEGO威高 11#13Cash flow and CAPEX Cash flows and CAPEX Affected by the COVID pandemic in 1H 2022, account receivable days of the hospital was slightly extended, and the Company's operating cash flow slightly decreased on a y-o-y basis The Company has recorded positive free cash flow for the fifth consecutive year since 2018 as operating cash flow grew and CAPEX stabilized Cash flow and CAPEX (RMBmm) 4,000 3,000 3,035 2,697 2,321 2,219 1,964 2,000 1,801 1,668 1,424 1,379 1,267 1,367 1,053 1,053 1,189 1,046 1,000 806 720 711 775 432 508 0 (213) (294) (40) (78) (246) (621) (592) (479) (538) (1,000) (751) (795) (1,019) (1,014) (942) (896) (1,131) (1,071) (1,513) (2,000) 2012 2013 2014 2015 2016 2017 2018 ■Capex (RMBmm) ■ Operating cash flow (RMBmm) 2019 2020 2021 1H2021 2H2021 1H2022 ■Free cash flow (RMBmm) WEGO威高 Note: The above figures are only for the purpose of reflecting the trend at the operational level of the Company. The specific figures are subject to performance reports 12#14Other financial data Other financial data Inventory turnover in days1 Working capital Account receivable turnover in days¹ 1H2022 96 1H2021 104 138 131 Account payable turnover in days1 79 78 Cash and bank balances (RMBbn) 6.72 6.58 Cash and debt Total debt (RMBbn) 4.37 4.45 Net cash (Net debt) (RMBbn) 2.35 2.13 Total debt/EBITDA (x) 1.0x 1.2x Leverage analysis Net debt/EBITDA (x) Net cash Net cash Interest coverage ratio² (x) 30.8x 28.9x Current ratio 3.0x 2.9x Current ratio and return analysis ROE ROA 13.3% 9.2% 12.6% 8.1% WEGO威高 Note: 1 Average working capital days; 2 Interest coverage ratio = EBITDA/financing costs; The above figures are only for the purpose of reflecting the trend at the operational level of the Company. The actual figures are subject to performance reports 13#15WEGO Strategic Outlook#16Management vision In response to the policy changes, competition landscape, clinical demands and the accumulation of in-house resources, WEGO proposed three operational strategies – “platform-oriented", "international” and “digitization", and two guarantee strategies - "talents" and "innovation" ا كما Take advantage of the open, inclusive and sharing platform • Build diversified product ecosystem and coordinate organizational system, achieving large-scale operation Meet or exceed customer needs with complete product solutions. Widen the product line and refine the single product Maintain leading position in China and achieve coordinated development globally Maintain the leading position in China's medical device industry • Actively promote the company's global resource sharing, realize the coordinated development of domestic and foreign markets WEGO威高 Digital Strategy to improve management excellence and explore new growth drivers ● Continue to promote digitalization in to enhance competitiveness in manufacturing, R&D and marketing • Digital products, such as Mobile Nursery Management Software, are also new growth drivers Establish a talent incentivization system Establish well-structured talent incentivization system to stimulate the creativity of employees Improve innovation capabilities to achieve sustainable development . • Existing products upgrades: upgrade of existing products, functional improvements, application of new materials and cost control by product lines New product: set up R&D centers in Shanghai and Suzhou, bring in professional R&D talents, and focus on key technical bottlenecks and the R&D work of major product 15#17Growth initiatives Growth strategies Benefiting from the continuous expansion of the global medical industry, Weigao plans to build a platform and provide systematic solutions to accelerate future growth Strategic Acquisitions • Replicating the success of Argon and Rad Source by strategically explore acquisition opportunities to broaden our product portfolio and global market coverage and further increase our scale 06 STRATEGIC ACUISITIONS PRODUCT UPGRADES AND DIVERSIFICATION 01 • Product Upgrades and Diversification Focus future developments on higher • technology and higher margin products where barriers to entry are greater Continuing to diversify our product mix to better combat the evolving market Direct Sales Channels Establishing direct sales channels for select product lines in order to provide Weigao with greater pricing power and in turn, higher margins 05 $ DIRECT SALES CHANNELS WEGO感高 $1 IMPORT SUBSTITUTION 02 Import Substitution Tapping into the high-tech markets Importing cutting edge technology to meet the growing demands of Chinese consumers Product Partnerships 04 • Partnering with key customers to design bespoke products to better suit client needs WEGO威高 PRODUCT PARTNERSHIPS STRATEGIC COLLABORATION 03 Strategic Collaboration Adopt open and diverse cooperation to introduce external capital and expertise to foster further innovation 16#18Key milestones WEGO烕高 Established Weigao Group focusing on disposable medical consumables • 2004 • • NIKKISO Weigao switched from the GEM to the Main Board in HK Formed a JV with Nikkiso in terms of hemodialysis machine Launched dialyzers to enter the hemodialysis market A ARGON MEDICAL DEVICES Announced the acquisition of Argon Medical, a leading U.S. manufacturer of interventional instruments Won the second prize of the National Technology Invention Award for the new technology of infusion medical consumables preparation and its large-scale application 2009 2012 2015 2018 BEST MANAGED COMPANIES 民企卓越管理公司 Selected as one of China's leading private companies with outstanding management for 4 consecutive years RAD SOURCE Completed the acquisition of Rad Source, a leading manufacturer of blood irradiators Acquired a controlling interest in a U.S. supplier to enter the Latin American market 2020 2021 0 威净 WEGOBP Weigao Blood Purification submitted the application for HKIPO 2022 Established the orthopedic business 2007 1988 2005 2008 Listed on HKEX'S GEM HKEX 香港交易所 2010 2013 2017 2019 Weigao Orthopedics went public on the STAR Market Signed an 8-year loan agreement Received the Outstanding with IFC, totaling US$20mm Contribution Award for Industry- University- Research Cooperation and Innovation in Shandong Province Formed a JV with ⚫ Terumo in the field of peritoneal dialysis TERUMO Obtained a 5-year loan of RMB600mm from IFC The Company's shares successfully obtained and completed the pilot full circulation in Hong Kong market and became a constituent stock of Hang Seng HK Stock Connect Index Obtained RMB1bn IFC green bonds and RMB500 million loan WEGO威高 XX 17 17#19Weigao's corporate structure 2.06% Equity incentive 45.94% Weigao Holdings 52.00% Public WEGO威高 Weigao (stock code: HK-1066) 100% Medical Device 72.2% Weigao Orthopaedic Argon Medical 89.8% 95.9% (U.S.) Puri Packaging 100% Blood Technology 26.6% Blood Purification • Clinical care • Wound management ⚫ Medical testing • Anesthesia and surgery Weigao (Spine & Trauma) • Biopsy • Vascular Pre-filled syringes (with injection • • Star Joint • Yahua (Spine & Joint) Bangde (Trauma) intervention Drainage instruments • Guidewires & accessories Coating (OEM) needles) Pre-filled syringe ancillary products (booster, cone head, screw soft cap, packaging method, etc.) Blood bags, blood transfusion equipment • Dialyzer • Dialysis machine • • • Blood irradiators • Small animal irradiators Cell irradiators for research Peritoneal dialysis solution • Peritoneal dialysis • related equipment Dialysis centers • Virus irradiator Note: WEGO Data as of Jun 30, 2022 18#20Disclaimer This document does not constitute, or form part of any offer for subscription or sale of, or solicitation of any offer to subscribe for or sale of any securities of Shandong Weigao Group Medical Polymer Company Limited ("Weigao Group"), nor shall it be construed as calculated to invite any such offer, nor shall it form the basis of, nor can it be relied on in connection with, or act as an inducement to enter into any contract or commitment whatsoever. Forward-Looking Statements This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of Weigao Group, and certain of the plans and objective of the management of Weigao Group. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of Weigao Group to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such forward-looking statements were based on assumptions regarding Weigao Group's present and future business strategies and the political and economic environment in which Weigao Group and its subsidiaries will operate in the future. Reliance should not be placed on these forward-looking statements, which reflect the view of Weigao Group's management as of the date of this presentation only. Confidentiality This document is given to you on a confidential basis and must not be passed to, or their contents disclosed to, any other person and no copy shall be taken hereof. WEGO威高 19 19