Shanghai Fosun Pharmaceutical : CONNECTED TRANSACTION - 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 TRANSACTION

ENTERING INTO THE CAPITAL INCREASE AGREEMENT

CAPITAL INCREASE AGREEMENT

The Board announces that, on 1 November 2019, Chancheng Hospital (a subsidiary of the Company), Youle Information and Shenzhen Fosun Health entered into the Capital Increase Agreement, pursuant to which Chancheng Hospital intends to contribute RMB10.408 million to subscribe for an additional registered capital of RMB10.408 million of Shenzhen Fosun Health. Upon completion of the transaction under the Capital Increase Agreement, Chancheng Hospital and Youle Information will hold 51% and 49% shareholding in Shenzhen Fosun Health, respectively, and Shenzhen Fosun Health will become a subsidiary of the Group.

HONG KONG LISTING RULES IMPLICATIONS

As the date of this announcement, Shenzhen Fosun Health is a wholly-owned subsidiary of Youle Information, and Youle Information is an associate of Mr. Guo Guangchang, the controlling shareholder of the Company. Accordingly, Youle Information and Shenzhen Fosun Health constitute connected persons of the Company under Rule 14A.07 of the Hong Kong Listing Rules. Therefore, the entering into of the Capital Increase Agreement constitutes a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules.

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Given the parties to the Capital Increase Agreement constitute the same connected person as the party to the Share Trust Agreement dated 15 February 2019, the Futuo Biological Capital Increase Agreement dated 25 March 2019, the Investment Agreement dated 26 August 2019 and the Share Purchase Agreement dated 30 September 2019, the Capital Increase Agreement, the Share Trust Agreement, the Futuo Biological Capital Increase Agreement, the Investment Agreement and the Share Purchase Agreement 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, the Share Trust Agreement, the Futuo Biological Capital Increase Agreement, the Investment Agreement and the Share Purchase Agreement is more than 0.1% but less than 5%, according to the Hong Kong Listing Rules, the transaction contemplated under the Capital Increase Agreement is subject to reporting and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

1. CAPITAL INCREASE AGREEMENT
   The Board announces that, on 1 November 2019, Chancheng Hospital (a subsidiary of the Company), Youle Information and Shenzhen Fosun Health entered into the Capital Increase Agreement, pursuant to which Chancheng Hospital intends to contribute RMB10.408 million to subscribe for an additional registered capital of RMB10.408 million of Shenzhen Fosun Health. Upon completion of the transaction under the Capital Increase Agreement, Chancheng Hospital and Youle Information will hold 51% and 49% shareholding in Shenzhen Fosun Health, respectively, and Shenzhen Fosun Health will become a subsidiary of the Group.
   The principal terms of the Capital Increase Agreement are summarised below. Date
   1 November 2019 Parties
2. 1. Chancheng Hospital;
   2. Shenzhen Fosun Health; and
   3. Youle Information

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Consideration

Chancheng Hospital intends to contribute RMB10.408 million to subscribe for the additional registered capital of Shenzhen Fosun Health. The amount of the additional registered capital is determined upon negotiation on arm's-length basis by all parties of the Capital Increase Agreement based on the funds required for Shenzhen Fosun Health to carry out its principal business.

The capital contribution will be financed by the self-raised funds of Chancheng Hospital.

Capital increase arrangement

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

1. Within 10 working days from the signing date of the Capital Increase Agreement, Chancheng Hospital shall deposit RMB4.163 million for the first instalment to Shenzhen Fosun Health for the capital increase; and
2. Upon the Capital Increase Agreement comes into effect, Shenzhen Fosun Health shall submit a business milestone plan for October 2019 to December 2020 to Chancheng Hospital. Chancheng Hospital shall assess the remaining capital contribution before 31 July 2020 based on the performance of such plan on 30 June 2020.

Shareholding structure of Shenzhen Fosun Health

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

				RMB: million
Shareholders of Shenzhen	Before completion of the	After completion of the
Fosun Health	Capital Increase Agreement	Capital Increase Agreement
	Capital		Capital
	contribution	Shareholding	contribution	Shareholding
Youle Information	10	100%	10	49%
Chancheng Hospital	0	0%	10.408	51%
Total	10	100%	20.408	100%

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Other major terms

1. 1. The Capital Increase Agreement shall be governed by the laws in the People's Republic of China; any dispute which cannot be settled through negotiation may be referred to the Shanghai International Economic and Trade Arbitration Commission (Shanghai International Arbitration Center) for arbitration in accordance with its then effective arbitration rules.
   2. The Capital Increase Agreement shall become effective upon signing by the parties thereto.
2. REASONS AND BENEFITS OF THE CAPITAL INCREASE AGREEMENT
   As an Internet platform, Shenzhen Fosun Health takes family doctor service as the starting point and focuses on serving household users by connecting medical institutions in the community with specialised hospitals in order to develop a long-term service relationship with trust. Upon completion of the transaction, Chancheng Hospital will be able to develop new medical services and products based on the Internet to establish a service network spanning from communities to hospitals, and have access to maintenance and optimisation in a timely manner. The transaction will utilise the resources and expertise of all parties for further diversifying the business model of Chancheng Hospital, which will help expanding service capacity and influence.
   The Directors (including the independent non-executive Directors) consider that the terms 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. Wang Can, Ms. Mu Haining and Mr. Liang Jianfeng, being Directors, abstained from voting on the resolution of the Board in respect of the entering into of the Capital Increase Agreement, while the 5 remaining Directors (including 4 independent non-executive Directors) participated in the voting and approved unanimously.
3. INFORMATION ON 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, it is a subsidiary wholly-owned by Youle Information. Its scope of business mainly includes health management, health consultation, corporate management consultation, business information consultation, information technology consultation, computer technology development, technical services, application software services, basic software services and computer system services.
   As at 30 September 2019, the unaudited total assets of Shenzhen Fosun Health amounted to RMB1.33 million.

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INFORMATION ON OTHER PARTIES

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. Its scope of business mainly includes 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 indirectly controlled by the Company. Its scope of business mainly includes general hospitals, investment in the medical and health industry and related fields (health care and medical education), and provision of hospital management consultation.

1. HONG KONG LISTING RULES IMPLICATIONS
   As the date of this announcement, Shenzhen Fosun Health is a wholly-owned subsidiary of Youle Information, and Youle Information is an associate of Mr. Guo Guangchang, the controlling shareholder of the Company. Accordingly, Youle Information and Shenzhen Fosun Health constitute connected persons of the Company under Rule 14A.07 of the Hong Kong Listing Rules. Therefore, the entering into of the Capital Increase Agreement constitutes a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules.
   Given the parties to the Capital Increase Agreement constitute the same connected person as the party to the Share Trust Agreement dated 15 February 2019, the Futuo Biological Capital Increase Agreement dated 25 March 2019, the Investment Agreement dated 26 August 2019 and the Share Purchase Agreement dated 30 September 2019, the Capital Increase Agreement, the Share Trust Agreement, the Futuo Biological Capital Increase Agreement, the Investment Agreement and the Share Purchase Agreement 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, the Share Trust Agreement, the Futuo Biological Capital Increase Agreement, the Investment Agreement and the Share Purchase Agreement is more than 0.1% but less than 5%, according to the Hong Kong Listing Rules, the transaction contemplated under the Capital Increase Agreement is subject to reporting and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

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1. DEFINITIONS

Unless the context otherwise requires, the following expressions have the following meanings in this announcement:

''A Share(s)''	the domestic share(s) of the Company with a nominal value of
	RMB1 each, which are listed on Shanghai Stock Exchange and
	traded in RMB
''Board''	the board of Directors
''Capital Increase	a capital increase agreement dated 1 November 2019 entered into
Agreement''	between Chancheng Hospital, Youle Information and Shenzhen
	Fosun Health in relation to the 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), a subsidiary of the Company
''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 Hong Kong Stock
	Exchange and Shanghai Stock Exchange, respectively
''Investment Agreement''	an investment agreement dated 26 August 2019 entered into
	between the Company and SFHIH in relation to the proposed
	establishment of a joint venture
''connected person(s)''	has the meaning ascribed to it under the Hong Kong Listing Rules
''Director(s)''	director(s) of the Company
''Futuo Biological Capital	a capital increase agreement dated 25 March 2019 entered into
Increase Agreement''	between the Company and SFHIH in relation to the capital
	increase in Shanghai Futuo Biotech Development Co., Ltd.* (上海
	復拓生物科技發展有限公司)
''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, the controlling shareholder of the Company
''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 Hong Kong Stock Exchange
	and traded in HK$
''Hong Kong''	the Hong Kong Special Administrative Region of the PRC
''Hong Kong dollars'', ''HK	Hong Kong dollars, the lawful currency of Hong Kong
dollars'' or ''HK$''
''Hong Kong Listing Rules''	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
''Hong Kong Stock	The Stock Exchange of Hong Kong Limited
Exchange''
''PRC'' or ''China''	the People's Republic of China, for the purpose of this
	announcement, excluding the Hong Kong and Macau Special
	Administrative Regions of the PRC and Taiwan region
''RMB'' or ''Renminbi''	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, which is a subsidiary wholly-owned by
	Fosun High Tech
''Shareholders''	holder(s) of the Share(s)
''Shares''	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, which is a subsidiary

wholly-owned by Youle Information as at the date of this announcement

''Share Purchase Agreement'' the Share Purchase Agreement dated 30 September 2019 entered into between Ample Up Limited and Magnificent View Investments Limited

''Share Trust Agreement'' a share trust agreement dated 15 February 2019 entered into between the Company, SFHIH and Yadong Xinmo in relation to the entrustment of certain equity interest by the Company and

SFHIH

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''US$''	US dollars, the lawful currency of United States
''Yadong Xinmo''	Yadong Xinmo Investment Management Co., Ltd.* (亞東信摩投資
	管理有限公司), a company established in the PRC with limited
	liability
''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
''%''	per cent
	By order of the Board
	Shanghai Fosun Pharmaceutical (Group) Co., Ltd.*
	Chen Qiyu
	Chairman
Shanghai, PRC
1 November 2019

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. Wang Can, Ms. Mu Haining and Mr. Liang Jianfeng; 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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