Beijing Enterprises Medical and Health Industry Gr : Announcements and Notices - Termination of Continuing Connected Transaction in Relation to Hospital Management Agreement and Lease Agreement

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.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2389) TERMINATION OF CONTINUING CONNECTED TRANSACTION IN RELATION TO HOSPITAL MANAGEMENT AGREEMENT AND LEASE AGREEMENT

Reference is made to the announcement of Beijing Enterprises Medical and Health Industry Group Limited (the "Company") dated 16 May 2016 in relation to the continuing connected transaction of hospital management agreement and lease agreement (the "Announcement"). Unless otherwise defined, capitalised terms used in this announcement have the same meanings as those defined in the Announcement.

On 12 October 2016, Beijing Yicheng, Beijing Lianjiao Factory and Beijing Lianjiao Hospital entered into two termination agreements (the "Termination Agreements") to terminate the Management Agreement and Lease Agreement, respectively and release all obligations of each party to the Management Agreement and Lease Agreement with immediate effect.

REASONS FOR ENTERING INTO THE TERMINATION AGREEMENTS

The Group principally engaged in the provision of medical care, health care and geriatric care related services and products. Beijing Lianjiao Hospital, which is a non-profit degree one, class one hospital, promoted by Beijing Lianjiao Factory, currently holds the Non-profit Medical Institution Practice Licence and Beijing Pension Service Practice Licence (the "Licences"). Both parties' intention is to develop the Beijing Lianjiao Hostipal into a middle-high class special hospital.

- 1 -

However, the Company received a notification from Beijing Lianjiao Factory that it has used its best endeavours to renew the Licences without any success and the Hospital may only be operated till first quarter of year 2017. Given the increasing uncertainty in the renewal of the Licences, all parties mutually agreed to enter into the Termination Agreements so as to avoid incurring unnecessary cost.

The terms of the Termination Agreements have been arrived at based on arm's length negotiations amongst the parties and are on normal commercial terms. The Directors, including the Independent Non-executive Directors, consider that the terms of the Termination Agreements are fair and reasonable and in the interests of the Company and its shareholders as a whole.

The Board considers that the execution of the Termination Agreements will not have any material adverse impact on the existing business of the Group and would allow the Group to have more flexibility to reassess the proposed expansion of the Group's medical business.

Implications under the Listing Rules

As at the date of this announcement, Beijing Holdings, through its non-wholly owned subsidiary, holds approximately 15.16% interest in the Company and is a substantial shareholder of the Company. Beijing Lianjiao Factory is an indirect wholly-owned subsidiary of Beijing Holdings, and is therefore a connected person of the Company under the Listing Rules. As the continuing connected transactions contemplated under the Management Agreement and the Lease Agreement was terminated, the Company is subject to the announcement requirement under Rule 14A.35 of the Listing Rules.

By Order of the Board of

Beijing Enterprises Medical and Health Industry Group Limited Zhu Shi Xing

Chairman

Hong Kong, 12 October 2016

As at the date of this announcement, the Board comprises seven Executive Directors, namely Mr. Zhu Shi Xing, Mr. Liu Xue Heng, Mr. Gu Shan Chao, Mr. Hu Xiao Yong, Mr. Hu Shiang Chi, Mr. Wang Zheng Chun and Mr. Zhang Jing Ming; one Non-Executive Director, namely Mr. Robert Winslow Koepp and four Independent Non-Executive Directors, namely Mr. Gary Zhao, Mr. Tse Man Kit, Keith, Mr. Wu Yong Xin and Mr. Zhang Yun Zhou.

- 2 -