Shanghai Fosun Pharmaceutical : CONNECTED TRANSACTION - ENTERING INTO THE CAPITAL INCREASE AGREEMENT (H SHARES)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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.

- 1 -

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

- 2 -

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%

- 3 -

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.

- 4 -

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.

- 5 -