Huadong Medicine Co., Ltd (SZSE:000963) signed an equity transfer letter of intent to acquire 18.6% stake in Zhejiang Jolly Pharmaceutical Co., Ltd. (SZSE:300181) from Deqing Wuling Equity Investment Partnership Enterprise (Limited Partnership) and Yu Youqiang for CNY 1.1 billion on May 14, 2019. Under the terms, Yu Youqiang will transfer 100 million shares representing 16.43% stake and Deqing Wuling Equity Investment Partnership Enterprise (Limited Partnership) will transfer 13.27 million shares representing 2.17% stake of Zhejiang Jolly Pharmaceutical respectively to Huadong Medicine. The first share transfer of 52.35 million shares will be initiated within 5 working days after the formal share transfer agreement takes effect, and the parties shall cooperate with the relevant institutions. The second share delivery of 30.42 million shares will be done before January 10, 2020 and the remaining 30.43 million shares will deliver in August 30, 2020. Post completion, Yu Youqiang will hold 73.19 million shares representing 12.03% stake in Zhejiang Jolly Pharmaceutical. After the parties to the transaction sign the formal share transfer agreement and complete the first share transfer registration procedure, the controlling shareholder of the company will be changed from Yu Youqiang to Huadong Medicine, and the actual controller will be changed to Hu Kaijun.

Huadong Medicine Co., Ltd (SZSE:000963) cancelled the acquisition of 18.6% stake in Zhejiang Jolly Pharmaceutical Co., Ltd. (SZSE:300181) from Deqing Wuling Equity Investment Partnership Enterprise (Limited Partnership) and Yu Youqiang on October 19, 2019.