China Shineway Pharmaceutical : Announces Annual Results - Turnover Reached RMB1,993 million, Proposed Final and Special Dividend Totaling RMB21 Cents per Share

【For Immediate Release】

中國神威藥業集團有限公司

China Shineway Pharmaceutical Group Limited

（Stock code: 2877）

China Shineway Announces Annual Results Turnover Reached RMB1,993 million Proposed Final and Special Dividend Totaling RMB21 Cents per Share Financial Highlights

RMB	For the Year Ended 31 December
	2016	2015	Changes
Turnover (Million)	1,993	2,055	-3.0%
Profit for the Year (Million)	589	658	-10.4%
Basic and Diluted Earnings per Share (RMB cents)	71	80
Final Dividend per Share (RMB cents)	12	12
Special Dividend per Share (RMB cents)	9	9

RMB (Million)	For the Year Ended 31 December 2016
	Sales	Growth Rate	Product Mix
Injections	1,110	-4.9%	55.7%
Soft Capsules	363	-11.5%	18.2%
Granules	384	-2.2%	19.3%
Other Product Formats	136	60.1%	6.8%

(Hong Kong, 30 March 2017) ---- The largest Chinese medicine injections, soft capsules and granules manufacturer, China Shineway Pharmaceutical Group Limited ("China Shineway"), and collectively with its subsidiaries ("the Group") (SEHK code: 2877) today announced its annual results for the year ended 31 December 2016 ("the year under review"), of which, the Group recorded a turnover of approximately RMB1,993 million (2015: approximately RMB2,055 million), representing a decrease of approximately 3.0% as compared to last year. Profit for the year decreased by approximately 10.4% to approximately RMB589 million (2015: approximately RMB658 million). Basic and diluted earnings per share were approximately RMB71 cents (2015: approximately RMB80 cents). As at 31 December 2016, bank balances and cash was recorded at approximately RMB3,218 million (2015: approximately RMB2,826 million).

The Board of Directors proposed that a final dividend of RMB12 cents (2015: RMB12 cents) per share and a special dividend of RMB9 cents (2015: RMB9 cents) per share to be paid. In addition to the interim dividend of RMB11 cents per share already paid (2015: RMB11 cents), dividend paid for the full year amounted to RMB32 cents (2015: RMB32 cents) per share.

Mr. Li Zhenjiang, Chairman of the Group said, "2016 is the start of China's 13th Five-Year Plan. Under the major reformation of the pharmaceutical market and with the new healthcare business model becoming more evident, the Group continues to promote its reformation by putting its focus on innovating the marketing model. The Group has a long-term vision of becoming the industry leader, by seizing the chances to build medical retail sales and hospital sales networks, also adjusting the marketing organisation structure and promotes strategic reformation of the marketing model."

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During 2016, the Group recorded RMB1,110 million on sales of injection products (2015: approximately RMB1,167 million), representing a decrease of 4.9% from the year before. Amongst these injection products, Qing Kai Ling injection remained the key product of the Group. Injection products accounted for 55.7% of the Group's turnover in 2016 (2015: 56.8%). The Group believes that it is currently the largest Chinese medicine injections manufacturer in the PRC in terms of sales volume and production capacity, with production capacity of approximately 3.2 billion vials per annum.

The Group recorded RMB363 million on sales of soft capsule products during the year under review (2015: approximately RMB410 million), representing a decrease of 11.5% from the previous year. Soft capsule products accounted for 18.2% (2015: 20.0%) of the Group's turnover in 2016. With the production capacity for soft capsules of 3.5 billion capsules per annum, the Group believes that it is currently the largest Chinese medicine soft capsules manufacturer in the PRC in terms of sales volume and production capacity.

For the year under review, sales of granule products decreased by 2.2% to RMB384 million (2015: approximately RMB393 million). Granule products accounted for 19.3% (2015: 19.1%) of the Group's turnover in 2016. The Group has annual production capacity for granule products of 3.4 billion bags per annum. In terms of sales volume and production capacity, the Group believes that it is currently the largest Chinese medicine granules manufacturer in PRC.

Sales of other products in 2016 increased by 60.1% to RMB136 million compared to last year. Such increase was mainly attributable to the rise in sales of Chinese medicine prescription granule and compound liquorice tablets as compared with last year.

The six key products of the Group were Qing Kai Ling Injection, Shen Mai Injection, Shu Xie Ning Injection, Wu Fu Xin Nao Qing Soft Capsule, Huo Xiang Zheng Qi Soft Capsule and Pediatric Qing Fei Hua Tan Granule.

Under the national Beijing-Tianjin-Hebei integration policy, China Shineway integrated the research and development and industry advantages in Beijing and Hebei and initiated the Shineway Beijing-Tianjin-Hebei Cooperation and Development innovative "1+3" project. Jing Jin Ji Lian Chuang Medicine Research (Beijing) Limited was established in Beijing in 2016 as a new drug research and development center, the medicine research center located in Yanjiao is used as the base for pilot scale testing and incubation, Beijing Wanter Bio-Pharmaceutical is used as the base for manufacturing biochemical drugs, and the headquarter of the Group is used as the base for manufacturing Chinese medicine and chemical drugs. Medicine innovation project is also set up for research and development, incubation and production chain on innovative medicines, which became the support for major scientific and technological projects in Beijing. On the other hand, the Group's products Huamoyan Granule and Qing Kai Ling Soft Capsule were included in the National Catalogues of Medical Insurance, Occupational Injury Insurance and Maternity Insurance (2017 Edition) after the expert review.

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In 2016, the Group submitted 30 patent applications in total, an increase compared to 2015 in terms of application number. The Group applied for and was awarded 1 Patent Award of Hebei Province and 1 Patent Award of Shijiazhuang. Huo Xiang Zheng Qi Soft Capsule was recognized as an Outstanding Patent Brand Cultivation project of Hebei Province while the Group was included in the National Intellectual Property Superior Enterprises by the State Intellectual Property Office. Projects for products such as Andrographolide and Cabazitaxe were launched by provincial and municipal science & technology commissions. Currently, there are 20 projects under research covering traditional Chinese medicine, chemical medicine and biochemical products. Research stages include pre-clinical research, clinical research, application and production research and reevaluation after listing, and treatment scope comprises heart and cerebral vessels, tumor and digestive system. All the pre-launch research for two types of five-grain meal replacement, vision supplement tablets and naturally carbonated water was completed in year under review.

Mr. Li Zhenjiang, Chairman of the Group concluded, "Presently the PRC is promoting reformation of medical treatment, medicare and medicine, the conflicts between industries during their development are resolved. Critical policies were introduced frequently, which created transformation from all aspects of industrial chain. Meanwhile, implementation of policies such as Law of Traditional Chinese Medicines bring about favourable impact to the Chinese medicine industry. The Group will carry on to focus on academic education to expand our point of sales and further strengthen promotion efforts of end user market to ensure better growth of products such as injections and soft capsules. Also, it will continue with evidence-based medical research on injection products, to develop a positive model of promoting the improvement of the product quality standards to align with the national standards. Back by the 'Shineway' brand's reputation and research capabilities, the Group with optimise product quality, inching towards the leading position in the healthcare business."

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About China Shineway Pharmaceutical Group Limited (Stock Code: 2877)

China Shineway Pharmaceutical Group Limited is one of the largest modern Chinese medicines manufacturers in the PRC. The Group is listed on the Main Board of Hong Kong Stock Exchange and is also a Hang Seng Composite Index constituent. After the "Shineway" trademark was named as China Famous Trademark in 2002, our "Wu Fu" trademark and "Shen Miao" trademark were subsequently identified as China Famous Trademarks. We became the first one in Hebei Province having three China Famous Trademarks. In addition, our "Bei Si" and " Zhikeping" trademark were also awarded as Hebei Province Famous Trademark.

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