Shanghai Fosun Pharmaceutical : CONTINUING CONNECTED-TRANSACTION REVISION OF ANNUAL CAPS OF EXISTING CONTINUING CONNECTED TRANSACTIONS

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上 海 復 星 醫 藥（ 集 團 ）股 份 有 限 公 司

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.*

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 02196)

CONTINUING CONNECTED TRANSACTION

REVISION OF ANNUAL CAPS OF EXISTING CONTINUING CONNECTED TRANSACTIONS

REVISION OF ANNUAL CAPS OF EXISTING CONTINUING CONNECTED TRANSACTIONS

On 30 November 2017, the Board resolved to revise the Sales Transaction Annual Cap and Purchase Transaction Annual Cap to RMB380 million and RMB1 million, respectively.

HONG KONG LISTING RULES IMPLICATIONS

According to Rule 14A.54 of the Hong Kong Listing Rules, if the Company proposes to revise the annual caps for continuing connected transactions, the Company will be required to re-comply with the provisions of Chapter 14A of the Hong Kong Listing Rules in relation to the relevant connected transaction. As at the date of this announcement, Chongqing Pharma is a substantial shareholder of Yao Pharma, an indirect non-wholly owned subsidiary of the Company, and therefore Chongqing Pharma is a connected person of the Company at the subsidiary level under Rule 14A.07(1) of the Hong Kong Listing Rules. As a result, the transactions contemplated under the Framework Sales and Purchases Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules. As the highest applicable Percentage Ratio (other than the profit ratio) calculated in accordance with the Hong Kong Listing Rules for the sum of the Revised Purchase Transaction Amount and the Revised Sales Transaction Annual Cap is more than 1% but less than 5%, and the transactions contemplated under the Framework Sales and Purchases Agreement are conducted on normal commercial terms, such transactions will be subject to the reporting, announcement and annual review requirements but exempted from the independent shareholders' approval requirement under the Hong Kong Listing Rules.

1. REVISION OF ANNUAL CAPS OF EXISTING CONTINUING CONNECTED TRANSACTIONS

   Reference is made to the Announcement in relation to, among others, the entering into the Framework Sales and Purchases Agreement. Unless otherwise specified, capitalised terms used herein shall have the same meaning ascribed to them in the Announcement.

   In view of the increase in the amount of Sales Products and Procurement Products between the Company and Chongqing Pharma, the Board anticipates that the Sales Transaction Annual Cap and the Purchase Transaction Annual Cap will not be sufficient to meet the requirements of the parties to the Framework Sales and Purchases Agreement for the year ended 31 December 2017. In 2017 (as at 31 October 2017), (i) the transaction amount incurred in respect of the Sales Products was approximately RMB265.23 million (unaudited), which was close to the Sales Transaction Annual Cap; and (ii) the transaction amount incurred in respect of the Procurement Products was approximately RMB0.15 million (unaudited), which was close to the Purchase Transaction Annual Cap.

   Accordingly, the Board resolved to revise the Sales Transaction Annual Cap and Purchase Transaction Annual Cap as follows:

   For the financial year from 1 January 2017

   to 31 December 2017

   For the financial year from 1 January 2017

   to 31 December 2017

   Sales Transaction Annual Cap

   Purchase Transaction Annual Cap

   RMB360 million Revised Sales

   Transaction Annual Cap

   RMB0.20 million Revised Purchase

   Transaction Annual Cap

   RMB380 million

   RMB1 million

2. BASIS OF DETERMINING THE REVISED SALES TRANSACTION ANNUAL CAP AND REVISED PURCHASE TRANSACTION ANNUAL CAP

   The Revised Sales Transaction Annual Cap and the Revised Purchase Transaction Annual Cap are determined, through arm's-length negotiations between the Group and Chongqing Pharma Group, based on the prevailing market prices of relevant products, and with reference to (i) the historical transaction amount in respect of the Sales Products and the Procurement Products; (ii) the anticipated increase in the amount of Sales Products supplied by the Group to Chongqing Pharma Group in view of the business relationship between the Group and Chongqing Pharma Group in the future, which will result in the expectation that the supply of Sales Products by the Group will continuously increase; and (iii) the anticipated increase in the amount of the Procurement Products purchased by the Group from Chongqing Pharma Group.

3. REASON FOR AND BENEFITS OF THE REVISION OF ANNUAL CAPS

   As disclosed above, in view of the business relationship between the Group and Chongqing Pharma Group in the future, the Board anticipated that the Sales Transaction Annual Cap and the Purchase Transaction Annual Cap will not be sufficient to meet the requirements of the parties to the Framework Sales and Purchases Agreement. Hence, the revisions to the Sales Transaction Annual Cap and the Purchase Transaction Annual Cap are required.

   The Directors (including the independent non-executive Directors) consider that the proposed Revised Sales Transaction Annual Cap and the Revised Purchase Transaction Annual Cap are on normal commercial terms and are fair and reasonable and in the interests of the Group and the Shareholders as a whole. Other than Mr. Chen Qiyu and Mr. Wu Yifang, who have abstained from voting on the resolutions approving the Revised Sale Transaction Annual Cap and the Revised Purchase Transaction Annual Cap due to positions held in certain subsidiaries of the Group, none of the other Directors have material interest in the Framework Sales and Purchases Agreement nor are they required to abstain from voting on the resolutions approving the Revised Sale Transaction Annual Cap and the Revised Purchase Transaction Annual Cap.

4. HONG KONG LISTING RULES IMPLICATION

According to Rule 14A.54 of the Hong Kong Listing Rules, if the Company proposes to revise the annual caps for continuing connected transactions, the Company will be required to re-comply with the provisions of Chapter 14A of the Hong Kong Listing Rules in relation to the relevant connected transaction. As at the date of this announcement, Chongqing Pharma is a substantial shareholder of Yao Pharma, an indirect non-wholly owned subsidiary of the Company, and therefore Chongqing Pharma is a connected person of the Company at the subsidiary level under Rule 14A.07(1) of the Hong Kong Listing Rules. As a result, the transactions contemplated under the Framework Sales and Purchases Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules. As the highest applicable Percentage Ratio (other than the profit ratio) calculated in accordance with the Hong Kong Listing Rules for the sum of the Revised Purchase Transaction Amount and the Revised Sales Transaction Annual Cap is more than 1% but less than 5%, and the transactions contemplated under the Framework Sales and Purchases Agreement are conducted on normal commercial terms, such transactions will be subject to the reporting, announcement and annual review requirements but exempted from the independent shareholders' approval requirement under the Hong Kong Listing Rules.

DEFINITIONS

''Announcement'' the announcement of the Company dated 28 March 2017 in relation to,

among other things, the entering into the Framework Sales and Purchases Agreement

''Revised Purchase

Transaction Annual Cap''

the revised cap amount of Purchase Transactions carried out during the term of the Framework Sales and Purchases Agreement

''Revised Sales Transaction Annual Cap''

the revised cap amount of Sales Transactions carried out during the term of the Framework Sales and Purchases Agreement

By Order of the Board

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.* Chen Qiyu

Chairman

Shanghai, the People's Republic of China 30 November 2017

As at the date of this announcement, the executive directors of the Company are Mr. Chen Qiyu, Mr. Yao Fang and Mr. Wu Yifang; the non-executive directors of the Company are Mr. Guo Guangchang, Mr. Wang Qunbin, Ms. Kang Lan and Mr. Wang Can; and the independent non-executive directors of the Company are Mr. Cao Huimin, Mr. Jiang Xian, Dr. Wong Tin Yau Kelvin and Mr. Wai Shiu Kwan Danny.

* For identification purposes only