China Shineway Pharmaceutical : Announces Interim Results for the Six Months Ended 30 June 2016 - Turnover Amounted to RMB931.6 Million, Proposed Interim Dividend of RMB11 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.HK） China Shineway Announces Interim Results for the Six Months Ended 30 June 2016 Turnover Amounted to RMB931.6 Million Proposed Interim Dividend of RMB11 Cents per Share Financial Highlights

RMB	For the six months ended 30 June
	2016	2015	Changes
Turnover (Million)	931.6	1,109.3	-16.0%
Profit for the period (Million)	276.5	385.6	-28.3%
Basic earnings per share (RMB cents)	33	47
Interim dividend per share (RMB cents)	11	11

RMB (Million)	For the six months ended 30 June
	Sales	Changes	Product mix
Injections	543.3	-12.7%	58.3%
Soft capsules	173.1	-31.8%	18.6%
Granules	163.7	-15.4%	17.6%
Other product formats	51.5	29.1%	5.5%

(Hong Kong, 26 August 2016) - China Shineway Pharmaceutical Group Limited, the largest Chinese medicine injections, soft capsules and granules manufacturer, and collectively with its subsidiaries ("China Shineway" or the "Company" and together with its subsidiaries, the "Group", stock code: 2877.HK) today announced its interim results for the six months ended 30 June 2016. During the period under review, the Group recorded a turnover of approximately RMB931.6 million (2015: RMB1,109.3 million), representing a decrease of 16.0% as compared to the corresponding period of last year. The Group's profit for the period ended 30 June 2016 is RMB276.5 million, representing a decrease of 28.3% as compared to the corresponding period of last year (2015: 385.6 million). The decrease in profit was mainly attributable to: (1) the decreases of average selling price and sales volume of the Group's pharmaceutical products as compared with those of the corresponding period in 2015, (2) amortization expense of intangible assets arising from the acquisitions during restructuring of new business areas of the Group caused the overall administrative expenses to increase slightly as compared to the same period of last year and (3) the Group has strengthened the development of new products leading to an increase in research and development costs for the period. Basic earnings per share were RMB33 cents (2015: RMB47 cents). As at 30 June 2016, bank deposits of the Group, amounting to RMB2,952.0 million (31 December 2015: RMB2,826.2 million).

The Board of Directors proposed to declare an interim dividend of RMB11 cents per share for the six months ended 30 June 2016 (2015: RMB11 cents), which will be paid on 28 October 2016, to the shareholders whose names appear on the Company's register of members on 14 October 2016.

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Mr. Li Zhenjiang, Chairman of the Group said, "For the first half of 2016, the decreases of average selling price and sales volume of the Group's pharmaceutical products led to the substantial decrease of profit. Yet, the Group has been proactively engaged in developing new products and expanding source of income. Following the improvement of regulations of medical industry in the PRC, the Group has faith in maintaining its leading position in the market."

For the first six months of 2016, the Group sold RMB543.3 million of injection products, representing a decline of 12.7% from the same period of last year. For the first six months of 2016, injection products accounted for 58.3% of the Group's total turnover as compared to 56.1% for the same period of last year. The sales of injection products recorded a decrease which was mainly attributable to the decline in sales of Qing Kai Ling Injection, Shen Mai Injection and Shu Xie Ning Injection.

For the first six months of 2016, the Group recorded RMB173.1 million on sales of soft capsule products, declined by 31.8% from the same period of last year. This was mainly due to the sales decrease of Wu Fu Xin Nao Qing Soft Capsule, Huo Xiang Zheng Qi Soft Capsule and Qing Kai Ling Soft Capsule. Soft capsule products accounted for 18.6% of the Group's turnover for the first six months of 2016, as compared to 22.9% for the same period of last year. The Group's production capacity for soft capsule products is presently at 3.5 billion capsules per annum. The Group believes that it is currently the largest Chinese medicine soft capsule manufacturer in the PRC in terms of sales volume and production capacity.

Sales of granule products in the first six months of 2016 had decreased by 15.4% as compared to the same period of last year, amounting RMB163.7 million. This was mainly resulted from the sales decrease of Pediatric Qing Fei Hua Tan Granule, Pediatric Hua Tan Zhi Ke Granule and Huamoyan Granule. Granule products accounted for 17.6% of the Group's turnover for the first six months of 2016 as compared to 17.4% of the same period of last year. The Group's production capacity of granule products is currently at 3.4 billion bags per annum. The Group believes that it is the largest Chinese medicine granule products manufacturer in the PRC in terms of sales volume and production capacity.

Sales of other products in the first six months of 2016 had increased by 29.1% as compared to the same period of last year, amounted to RMB51.5 million. The increase was mainly attributable to the increase in sales of Chinese Medicine Prescription Granule and tablets products as compared to the same period last year.

Core products of the Group are: 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.

The new product Dan Deng Tong Nao Hard Capsule and Soft Capsule, is used for treatment of stroke caused by congestion, and appropriate for treatment and recovery of ischemic infarction, which is listed in the National Catalogues of Medicine Insurance and Occupational Injury Insurance, and is regarded as a rapid growth product in future by the group. Another new one, Yiqi Tongluo Granule is for treatment of qi deficiency and blood stasis during the main and collateral channels (mild to moderate cerebral infarction) recovery period of stroke, developed after years by China PLA General Hospital and the Company and examined in a systematic clinical pesticide effect study and standardized clinical trial with a definite and safe treatment effect. The Group treats it as a large-potential medicine to be developed in future.

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The Group continues to strengthen the protection of its intellectual property rights. As at the date of the Interim Results announcement, the Group has obtained 53 patents for our inventions, and 46 invention patent applications are pending approval. As at 30 June 2016, the Group had 4 products listed as State Protected Chinese Medicines, including Lianshen Tonglin Tablet, Jianzhi Tongluo Soft Capsule, Qi Huang Tong Mi Soft Capsule and Shujin Tongluo Granule.

Mr. Li Zhenjiang concluded, "In recent years, medical industry grew steadily, following the extension of medical reform, the coverage of medical insurance expanded significantly, the medicine quality standard system and management were improved constantly, and the relevant policies issued by the State Council accelerated the development of health service industry, along with the extension of the new version of Essential Drug List and the supplemental Essential Drug catalogues of provinces, all these indicated a prosperous future of the Chinese medical industry development. While, the medical industry also faces uncertainties in many aspects including medical insurance payment system reform, drug price reduction and medical tenders, all of which will be the main policy factors unchangeably affect the industry growth and profit margin in the future. Therefore, the medical industry development will be full of opportunities and challenges. The Group will positively cope with policy changes, strengthens the academic education and terminal network construction, improves the control of terminals; accelerates the construction of talents team, improves the professional capacity of employees, creates a positive organizational atmosphere, stimulates the innovation energy of employees; promotes outstanding performance, enhances the operation and management ability. The Group will try to realise a maximization in the efficiency of marketing value chain to ensure the achievement of strategic target of our Group."

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About China Shineway Pharmaceutical Group Limited ( Stoc k Code: 2 877)

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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Jovian Communication │ Angel Yeung │ Tel：[phone] │shineway@jov ianco mm .co m