Shanghai Fosun Pharmaceutical : CONNECTED TRANSACTIONS - ENTERING INTO THE CAPITAL INCREASE AGREEMENT

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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)

CONNECTED TRANSACTIONS

ENTERING INTO THE CAPITAL INCREASE AGREEMENT

THE CAPITAL INCREASE AGREEMENT

The Board announces that, on 17 September 2020, the Company, Fosun Healthcare and Fosun High Tech entered into the Capital Increase Agreement with Shenzhen Fosun Health and its existing shareholders, Youle Information and Chancheng Hospital, pursuant to which each of the Company, Fosun Healthcare and Fosun High Tech agreed to make capital contribution in the amount of RMB20 million, RMB46 million and RMB34 million, respectively, to increase the registered capital of Shenzhen Fosun Health from RMB20.408 million to RMB 120.408 million. Upon completion of the transactions under the Capital Increase Agreement, the aggregate equity interest in Shenzhen Fosun Health held by the Company will be approximately 63.5% and Shenzhen Fosun Health will remain as a subsidiary of the Company.

IMPLICATIONS OF THE HONG KONG LISTING RULES

As Youle Information is a company controlled by Mr. Guo Guangchang, the controlling shareholder of the Company, therefore, Youle Information constitutes an associate of Mr. Guo Guangchang and a connected person of the Company under Chapter 14A of the Hong Kong Listing Rules. Further, as Fosun High Tech is the controlling shareholder of the Company, therefore, it also constitutes a connected person of the Company. Accordingly, the transactions contemplated under the Capital Increase Agreement constitute connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules. Given that the relevant parties to the Capital Increase Agreement are the same connected persons as the relevant parties to Previous Transactions, the transactions contemplated under the Capital Increase Agreement and the Previous Transactions shall be aggregated pursuant to Rule 14A.81 of the Hong Kong Listing Rules. As the percentage ratio applicable to the sum of the transactions contemplated under the Capital Increase Agreement and the Previous Transactions is more than 0.1% but less than 5%, the transactions contemplated under the Capital Increase Agreement are subject to reporting and announcement requirements but are exempted from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

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1. THE CAPITAL INCREASE CONTRACT
   The Board announces that, on 17 September 2020, the Company, Fosun Healthcare and Fosun High Tech entered into the Capital Increase Agreement with Shenzhen Fosun Health and its existing shareholders, Youle Information and Chancheng Hospital pursuant to which each of the Company, Fosun Healthcare and Fosun High Tech agreed to make capital contribution in the amount of RMB20 million, RMB46 million and RMB34 million, respectively, to increase the registered capital of Shenzhen Fosun Health from RMB20.408 million to RMB 120.408 million. Upon completion of the transactions under the Capital Increase Agreement, the aggregate equity interest in Shenzhen Fosun Health held by the Company will be approximately 63.5% and Shenzhen Fosun Health will remain as a subsidiary of the Company.
   The principal terms of the Capital Increase Agreement are summarised below:
   Date
   17 September 2020
   Parties
2. 1. The Company;
   2. Fosun Healthcare;
   3. Fosun High Tech;
   4. Youle Information;
   5. Chancheng Hospital; and
   6. Shenzhen Fosun Health

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Principal Terms

Under the Capital Increase Agreement, the parties agree to the increase in the registered capital of Shenzhen Fosun Health from RMB20.408 million to RMB120.408 million. The parties agreed that the capital contribution to Shenzhen Fosun Health in the aggregate amount of RMB100 million shall be made in the following manner:

	Capital contribution and subscription
Name of party	of additional registered capital
The Company	RMB20 millon
Fosun Healthcare	RMB46 millon
Fosun High Tech	RMB34 millon
Total	RMB100 millon

Such investment amount will be financed by the self-raised funds of each of the Company and Fosun Healthcare, respectively.

Capital Contribution Arrangement

According to the Capital Increase Agreement, each party will pay for the capital contribution according to the following arrangements:

1. Fosun High Tech and the Company shall make one-off payment of their respective capital contribution within five working days from the date of the Capital Increase Agreement; and
2. Fosun Healthcare shall make the first instalment of its capital contribution in the amount of RMB21 million within five working days from the date of the Capital Increase Agreement, and make the remaining part of its capital contribution in the amount of RMB25 million shall be made within half year from the date of the Capital Increase Agreement.

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Shareholding structure of Shenzhen Fosun Health

The shareholding structure of Shenzhen Fosun Health immediately before and after completion of the transactions contemplated under the Capital Increase Agreement is as follows:

			Unit: RMB million
	Before completion of the	After completion of the
Shareholders of	transactions under the Capital	transactions under the Capital
Shenzhen Fosun Health	Increase Agreement	Increase Agreement
	Contribution to	% of	Contribution to	% of
	the registered	equity	the registered	equity
	capital	interest	capital	interest
		(approximately)		(approximately)
The Company	0	0%	20	16.6%
Fosun Healthcare	0	0%	46	38.3%
Fosun High Tech	0	0%	34	28.2%
Youle Information	10	49%	10	8.3%
Chancheng Hospital	10.408	51%	10.408	8.6%
Total	20.408	100%	120.408	100%
Corporate governance

Following the completion of the transactions contemplated under the Capital Increase Agreement, the board of directors of Shenzhen Fosun Health shall consist of three directors, of which one director shall be nominated by Fosun High Tech and two directors shall be nominated by the Company; Shenzhen Fosun Health has 1 supervisor to be nominated by the Company.

Other terms

1. The Capital Increase Agreement shall be governed by the PRC law. Any dispute shall be resolved by amicable negotiation by parties; otherwise, a legal proceeding shall be brought to the people's court having jurisdiction at the signing place of the Capital Increase Agreement.
2. The Capital Increase Agreement shall become effective upon affixed with seal by, or signing of, the parties thereto.

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1. REASONS AND BENEFITS OF THE CAPITAL INCREASE AGREEMENT
   As an internet medical platform and with staring point of Internet medical consultation, family doctor services and health science content, Shenzhen Fosun Health provides internet medical and family health management services around family users. Entering into the Capital Increase Agreement may be benefit to integrating the medical service resources of the Group, accelerating the development of innovative medical service system, and promoting the internet capability and synergy of business segments of the Group. The proceeds of capital contribution shall be utilised for general working capital of Shenzhen Fosun Health.
   The Directors (including the independent non-executive Directors) consider that the terms of each of the Capital Increase Agreement are on normal commercial terms, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
   Mr. Chen Qiyu, Mr. Yao Fang, Mr. Xu Xiaoliang, Mr. Gong Ping and Mr. Pan Donghui, being Directors, abstained from voting on the resolution of the Board in respect of the entering into of the Capital Increase Agreemnt, while the remaining 5 Directors (including 4 independent non-executive Directors) participated in the voting and approved unanimously.
2. INFORMATION OF SHENZHEN FOSUN HEALTH
   Shenzhen Fosun Health is a company incorporated in the PRC with limited liability in January 2019. As at the date of this announcement, Youle Information and Chancheng Hospital holds approximately 49% and 51% shareholding in Shenzhen Fosun Health, respectively. Shenzhen Fosun Health is mainly engaged in, among others, health management and health consultation.
   The net profit (both before and after taxation) of Shenzhen Fosun Health for the financial year ended 31 December 2019 and the 6-month ended 30 June 2020 are as follows:

	Unit: RMB million
	For the	For the
	year ended	6-month ended
	31 December	30 June
	2019	2020
	(unaudited)	(unaudited)
Net profit/(loss) (before taxation)	(10.40)	(3.38)
Net profit/(loss) (after taxation)	(10.40)	(3.38)

As at 30 June 2020, the unaudited total asset value and the unaudited total net asset value of Shenzhen Fosun Health were RMB0.96 million and RMB0.38 million, respectively.

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1. INFORMATION OF OTHER PARTIES The Group
   The Group is a leading healthcare group in the PRC and primarily engaged in business segments including pharmaceutical manufacturing and R&D, healthcare services, medical devices and medical diagnosis as well as pharmaceutical distribution and retail.
   Fosun Healthcare
   Fosun Healthcare is a company incorporated in PRC with limited liability, and a subsidiary of the Company, which is mainly engaged in the investment in medical and healthcare industry and its related areas, including the pharmaceutical and healthcare industry and pharmaceutical and educational industry, performance of the hospital management as entrusted by medical and healthcare institutions and provision of hospital management consultancy (except brokerage).
   Fosun High Tech
   Fosun High Tech is a company incorporated in the PRC with limited liability and the controlling shareholder of the Company. Fosun High Tech is a wholly-owned subsidiary of Fosun International Limited (a company listed on the main board of the Hong Kong Stock Exchange with the stock code 00656), it mainly focuses on health, happiness and wealth businesses and provides high-quality products and services for families around the world.
   Youle Information
   Youle Information is a company incorporated in the PRC with limited liability. Its ultimate beneficial owner is Mr. Guo Guangchang, the controlling shareholder of the Company. Youle Informtion is mainly engaged in technical services, technical consultation, technology transfer and technology development in the fields of information technology and software technology.
   Chancheng Hospital
   Chancheng Hospital is a company incorporated in the PRC with limited liability and a subsidiary of the Company. Chancheng Hospital is mainly engaged in, among others, operation of general hospitals and investment in the healthcare industry and related fields (healthcare, medical education).

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1. IMPLICATIONS UNDER THE HONG KONG LISTING RULES
   As Youle Information is a company controlled by Mr. Guo Guangchang, the controlling shareholder of the Company, therefore, Youle Information constitutes an associate of Mr. Guo Guangchang and a connected person of the Company under Chapter 14A of the Hong Kong Listing Rules. Further, as Fosun High Tech is the controlling shareholder of the Company, therefore, it also constitutes a connected person of the Company. Accordingly, the transactions contemplated under the Capital Increase Agreement constitute connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules. Given that the relevant parties to the Capital Increase Agreement are the same connected persons as the relevant parties to Previous Transactions, the transactions contemplated under the Capital Increase Agreement and the Previous Transactions shall be aggregated pursuant to Rule 14A.81 of the Hong Kong Listing Rules. As the percentage ratio applicable to the sum of the transactions contemplated under the Capital Increase Agreement and the Previous Transactions is more than 0.1% but less than 5%, the transactions contemplated under the Capital Increase Agreement are subject to reporting and announcement requirements but are exempted from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.
2. DEFINITIONS

In this announcement, the following expressions have the following meaning unless the context otherwise specifies:

"A Share(s)"	the domestic Share(s) of the Company with a nominal value
	of RMB1 each, which are listed on the Shanghai Stock
	Exchange and traded in RMB
"associate"	has the meaning ascribed to it under the Hong Kong Listing
	Rules
"Board"	the board of Directors of the Company
"Capital Increase Agreement"	the capital increase agreement dated 17 September 2020
	entered into between the Company, Fosun Healthcare, Fosun
	High Tech, Youle Information, Chancheng Hospital and
	Shenzhen Fosun Health in relation to the proposed capital
	increase in Shenzhen Fosun Health
"Chancheng Hospital"	Foshan Chancheng Central Hospital Company Limited*
	(佛山市禪城區中心醫院有限公司), a for-profit medical
	institution established with the approval by the Population,
	Health and Drug Administration of Chancheng District,
	Foshan* (佛山市禪城區人口和衛生藥品監督管理局), and a
	subsidiary of the Company

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"Company"	Shanghai Fosun Pharmaceutical (Group) Co., Ltd.* (上
	海復星醫藥（集團）股份有限公司), a joint stock company
	established in the PRC with limited liability, the H Shares
	and A Shares of which are listed and traded on the Main
	Board of the Hong Kong Stock Exchange and the Shanghai
	Stock Exchange, respectively
"connected person(s)"	has the meaning ascribed to it under the Hong Kong Listing
	Rules
"Director(s)"	director(s) of the Company
"Equity Transfer Agreement"	an equity transfer agreement dated 17 September 2020
	entered into between Shanghai Fosun Pharmaceutical
	Industrial Development Co., Ltd.* (上海復星醫藥產業發展
	有限公司), a subsidiary of the Company, and SFHIH
"Fosun Healthcare"	Shanghai Fosun Healthcare (Group) Co., Ltd.* (上海復星醫
	療（集團）有限公司), a company established in the PRC with
	limited liability and a subsidiary of the Company
"Fosun High Tech"	Shanghai Fosun High Technology (Group) Company
	Limited* (上海復星高科技（集團）有限公司), a company
	established in the PRC with limited liability and the
	controlling shareholder of the Company
"Fujian Fund"	Shanghai Fujian Equity Investment Fund Management Co.,
	Ltd.* (上海復健股權投資基金管理有限公司), a company
	established in the PRC with limited liability and a subsidiary
	of the Company
"Fund Partnership Agreements"	(i) the limited partnership agreement in relation to the
	establishment of Suzhou Fund dated 18 May 2020 entered
	into between Ningbo Fuying, Suzhou Xingchen, Fosun High
	Tech and other investors; and (ii) the limited partnership
	agreement dated 18 May 2020 entered into between Ningbo
	Fuying, Tianjin Xingyao, Tianjin Xinghai Commercial
	Management Partnership (Limited Parnership)* (天津星海
	商業管理合夥企業（有限合夥）), Fosun High Tech and other
	investors
"Group"	the Company and its subsidiaries

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"H Share(s)"	the overseas listed share(s) of the Company with a nominal
	value of RMB1 each, which are listed on the Hong Kong
	Stock Exchange and traded in HK$
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Hong Kong Listing Rules"	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Ningbo Fuying"	Ningbo Fuying Investment Co., Ltd.* (寧波復瀛投資有限公
	司), a company established in the PRC with limited liability
	and a subsidiary of the Company
"Partnership Agreements"	the limited partnership agreements dated 30 March 2020
	entered into between the Company, Fujian Fund, Fosun
	High Tech and Tianjin Fuyao in relation to the formation of
	Suzhou Xingchen and Tianjin Xingyao
"Previous Transactions"	the transactions contemplated under the Share Purchase
	Agreement, 2019 Shenzhen Fosun Health Capital Increase
	Agreement, Partnership Agreements, Fund Partnership
	Agreements, Zhuorui Outpatient Capital Increase Agreement
	and Equity Transfer Agreement
"PRC"	the People's Republic of China, for the purpose of this
	announcement, excluding Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan region of the
	PRC
"RMB"	Renminbi, the lawful currency of the PRC
"SFHIH"	Shanghai Fosun Health Industry Holding Company Limited*
	(上海復星健康產業控股有限公司), a company established
	in the PRC with limited liability and a subsidiary of Fosun
	High Tech
"Share Purchase Agreement"	a share purchase agreement dated 30 September 2019
	entered into between Ample Up Limited, a subsidiary of the
	Company, and Magnificent View Investments Limited

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"Shareholder(s)"	holder(s) of the Share(s)
"Share(s)"	A Share(s) and H Share(s)
"Shenzhen Fosun Health"	Shenzhen Fosun Health Information Technology Company
	Limited* (深圳復星健康信息科技有限公司), a company
	established in the PRC with limited liability and a subsidiary
	of the Company
"subsidiary"	has the meaning ascribed to it under the Hong Kong Listing
	Rules
"Suzhou Xingchen"	Suzhou Xingchen Venture Investment Partnership (Limited
	Partnership)* (蘇州星晨創業投資合夥企業(有限合夥)), a
	limited partnership established in the PRC and a subsidiary
	of the Company
"Tianjin Fuyao"	Tianjin Fuyao Commercial Management Partnership
	(Limited Partnership)* (天津復曜商業管理合夥企業(有限合
	夥)), a limited partnership established in the PRC
"Tianjin Xingyao"	Xingyao (Tianjin) Investment Management Partnership
	(Limited Partnership)* (星耀（天津）投資管理合夥企業(有
	限合夥)), a limited partnership established in the PRC and a
	subsidiary of the Company
"Xingshuangjian Investment"	Shanghai Xingshuangjian Investment Management Co., Ltd.*
	(上海星雙健投資管理有限公司), a company established
	in the PRC with limited liability and a subsidiary of Fosun
	High Tech
"Youle Information"	Shanghai Youle Information Technology Company Limited*
	(上海有叻信息科技有限公司), a company established in the
	PRC with limited liability
"Zhuorui Outpatient Capital	A capital increase agreement dated 14 August 2020 entered
Increase Agreement"	into between Fosun Healthcare, Xingshuangjian Investment,
	SFHIH and Shanghai Zhuorui Integrated Outpatient Limited
	Company* (上海卓瑞綜合門診部有限公司)

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"2019 Shenzhen Fosun Health	a capital increase agreement dated 1 November 2019 entered
Capital Increase Agreement"	into between Foshan Chancheng, Youle Information and
	Shenzhen Fosun Health
"%"	per cent
	By order of the Board
	Shanghai Fosun Pharmaceutical (Group) Co., Ltd.*
	Chen Qiyu
	Chairman
Shanghai, the PRC
17 September 2020

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. Xu Xiaoliang, Mr. Gong Ping and Mr. Pan Donghui; and the independent non-executive directors of the Company are Mr. Jiang Xian, Dr. Wong Tin Yau Kelvin, Ms. Li Ling and Mr. Tang Guliang.

• for identification purposes only

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