China Medical System : The Inclusion of Hirudoid? in the Medical Insurance Catalogue

China Medical System Holdings Limited (the 'Company', together with its subsidiaries, the 'Group') is pleased to announce that according to a notice issued by National Healthcare Security Administration and the Ministry of Human Resources and Social Security of the People's Republic of China on 20 August 2019, the Group's product Hirudoid®® (Mucopolysaccharide Polysulfate Cream) has been included in Class B(乙類) List of national basic medical insurance, industrial injury insurance and maternity insurance drugs (2019 edition) (the 'Medical Insurance Catalogue'), which shall be officially implemented from January 1st, 2020.

Hirudoid® is the own product and the main product under dermatology line of the Group, and the only drug product of mucopolysaccharide polysulfate in mainland China. The Group acquired the related assets of Hirudoid® in mainland China from DKSH International AG on March 25th, 2015. For the six months ended by 30 June 2019, the revenue of Hirudoid® increased by 16.5% to 86.0 million RMB compared with the same period last year, accounting for 2.5% of the Group's revenue excluding the effect of the 'two-invoice system'.

The Company anticipates that the inclusion in Class B(乙類) of the Medical Insurance Catalogue will be conducive to the increase in market share and the marketing development of Hirudoid® in the long run, and will have a positive effect on the growth in sales and the long-term development of the Group.