Simcere Pharmaceutical : FURTHER ANNOUNCEMENT PROFIT FORECAST IN RELATION TO DISPOSAL OF SUBSIDIARIES

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Simcere Pharmaceutical Group Limited

先聲藥業集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock code: 2096)

FURTHER ANNOUNCEMENT

PROFIT FORECAST IN RELATION TO DISPOSAL OF SUBSIDIARIES

Reference is made to the announcement of Simcere Pharmaceutical Group Limited (the

• Company") dated April 15, 2021 (the "Announcement") with respect to connected transaction in relation to disposal of subsidiaries. Capitalised terms used herein shall have the same meanings as those defined in the Announcement.

COMPLIANCE WITH THE LISTING RULES

As disclosed in the Announcement, the consideration of the Disposal was arrived at after arm's length negotiations with reference to the inferred valuation attributed to the equity interest of Cell Therapy Business based on the fair value of Simgene Group, which conducts the Cell Therapy Business, as of January 31, 2021 as appraised by D&P China (HK) Limited (the "Valuer"), an independent valuer. As the valuation was prepared on the discounted cash flow basis under the income approach, such valuation constitutes a profit forecast under Rule

14.61 of the Listing Rules. Accordingly, the requirements under Rules 14.60A and 14.62 of the Listing Rules are applicable.

PROFIT FORECAST IN RELATION TO THE VALUATION METHOD

Pursuant to the valuation report dated March 5, 2021 prepared by the Valuer (the "Valuation Report"), details of the principal assumptions, including the commercial assumptions, upon which the profit forecast is based are set out as follows:

1. The forecast is a reasonable forecast of future events made by the management of the Company after due consideration.
2. Information provided by the management of the Company is true, accurate and complete.
3. There will be no material change in the existing political, legal, fiscal and economic conditions in the PRC in the foreseeable future.
4. There will be no material change in the taxation law in the PRC in the foreseeable future.

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1. Future exchange rates and interest rates will not differ materially from those prevailing market expectations.
2. Simgene Group's future business development will not be constrained by financing.
3. Simgene Group retains competent management, core staff and technical personnel to ensure its continuous operation.
4. Relevant industry trends and market conditions of Simgene Group will not significantly deviate from the economic forecast.

Confirmations

In accordance with Rule 14.62(2) of the Listing Rules, the Company has engaged its reporting accountant, KPMG, to report on the calculations on which the Valuation Report was based.

So far as the accounting policies and calculations are concerned, KPMG has reported to the Directors in respect of the arithmetical accuracy of the calculations of the forecast in connection with the valuation of Simgene Group as of January 31, 2021, prepared by the Valuer as set out in the Valuation Report. The Directors are solely responsible for the assumptions described above and the work performed by KPMG did not include any assessment of the reasonableness or validity of the assumptions. The calculations of forecast do not involve the adoption of accounting policies.

The Directors have reviewed the assumptions based upon which the valuation of Simgene Group was prepared and have considered the report from KPMG. The Directors confirm that the valuation of Simgene Group has been made after due and careful enquiry.

A report from KPMG dated April 28, 2021 in compliance with Rule 14.62(2) of the Listing Rules and a letter from the Board dated April 28, 2021 in compliance with Rule 14.62(3) of the Listing Rules have been submitted to the Stock Exchange, the texts of which are included in Appendix I and Appendix II to this announcement, respectively.

Experts and Consents

The qualifications of the experts who have given their statements in this announcement are as follows:

Name	Qualification
D&P China (HK) Limited	Valuer
KPMG	Certified Public Accountant, Hong Kong

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of the Valuer and KPMG is a third party independent of the Company and its connected person(s).

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To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, as of the date of this announcement, neither the Valuer nor KPMG has any shareholding, directly or indirectly, in any member of the Group, or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any securities in any member of the Group.

Each of the Valuer and KPMG has given and has not withdrawn its respective written consent to the publication of this announcement with the inclusion of its name and qualification, statements and report, and all references thereto in the form and context in which they are included.

By order of the Board of

Simcere Pharmaceutical Group Limited

Mr. Wan Yushan

Executive Director

Hong Kong, April 28, 2021

As at the date of this announcement, the Board comprises Mr. REN Jinsheng as the Chairman and executive Director, Mr. WAN Yushan and Mr. TANG Renhong as the executive Directors; Mr. ZHAO John Huan as the non-executive Director; and Mr. SONG Ruilin, Mr. WANG Jianguo and Mr. WANG Xinhua as the independent non-executive Directors.

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APPENDIX I - REPORT FROM KPMG

The following is the text of a report received from the Company's reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for inclusion in this announcement.

REPORT ON THE DISCOUNTED FUTURE CASH FLOWS IN CONNECTION WITH THE BUSINESS VALUATION OF SIMGENE GROUP LIMITED

TO THE BOARD OF DIRECTORS OF SIMCERE PHARMACEUTICAL GROUP LIMITED

We refer to the discounted future cash flows on which the business valuation ("the Valuation") dated March 5, 2021 prepared by D&P China (HK) Limited in respect of the appraisal of the fair value of Simgene Group Limited and its subsidiaries ("the Target Companies") as at January 31, 2021 is based. The Valuation is prepared based on the discounted future cash flows and is regarded as a profit forecast under paragraph 14.61 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

Directors' Responsibilities

The directors of Simcere Pharmaceutical Group Limited (the "Directors") are responsible for the preparation of the discounted future cash flows in accordance with the bases and assumptions determined by the Directors and as set out in the Valuation. This responsibility includes carrying out appropriate procedures relevant to the preparation of the discounted future cash flows for the Valuation and applying an appropriate basis of preparation; and making estimates that are reasonable in the circumstances.

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

The firm applies Hong Kong Standard on Quality Control 1 "Quality Control for Firms That Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements" issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountants' Responsibilities

Our responsibility is to report, as required by paragraph 14.62(2) of the Listing Rules, on the calculations of the discounted future cash flows used in the Valuation. The discounted future cash flows do not involve the adoption of accounting policies.

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Basis of Opinion

We conducted our engagement in accordance with the Hong Kong Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information" issued by the HKICPA. This standard requires that we plan and perform our work to obtain reasonable assurance as to whether, so far as the calculations are concerned, the Directors have properly compiled the discounted future cash flows in accordance with the bases and assumptions adopted by the Directors as set out in the Valuation. We performed procedures on the arithmetical calculations and the compilations of the discounted future cash flows in accordance with the bases and assumptions adopted by the Directors. Our work is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing issued by the HKICPA. Accordingly, we do not express an audit opinion.

Opinion

In our opinion, so far as the calculations are concerned, the discounted future cash flows have been properly compiled in all material respects in accordance with the bases and assumptions adopted by the Directors as set out in the Valuation.

Other matters

Without qualifying our opinion, we draw to your attention that we are not reporting on the appropriateness and validity of the bases and assumptions on which the discounted future cash flows are based and our work does not constitute any valuation of the Target Companies or an expression of an audit or review opinion on the Valuation.

The discounted future cash flows depend on future events and on a number of assumptions which cannot be confirmed and verified in the same way as past results and not all of which may remain valid throughout the period. Further, since the discounted future cash flows relates to the future, actual results are likely to be different from the discounted future cash flows because events and circumstances frequently do not occur as expected, and the differences may be material. Our work has been undertaken for the purpose of reporting solely to you under paragraph 14.62(2) of the Listing Rules and for no other purpose. We accept no responsibility to any other person in respect of, arising out of or in connection with our work.

KPMG

Certified Public Accountants 8th Floor, Prince's Building 10 Chater Road

Central, Hong Kong April 28, 2021

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APPENDIX II - LETTER FROM THE BOARD

April 28, 2021

Listing Division

The Stock Exchange of Hong Kong Limited 12/F, Two Exchange Square

8 Connaught Place, Central,

Hong Kong

Dear Sirs,

Re: Simcere Pharmaceutical Group Limited (the "Company")

We refer to the announcement of the Company dated April 15, 2021 (the "Announcement"). Unless the context otherwise requires, terms defined in the Announcement shall have the same meanings when used herein.

Reference is made to the valuation report (the "Valuation Report") dated March 5, 2021 prepared by D&P China (HK) Limited, an independent valuer (the "Valuer"), in relation to the valuation of the Cell Therapy Business conducted by Simgene Group. The valuation is prepared on the discounted cash flow basis under the income approach, which is regarded as a profit forecast under Rule 14.61 of the Listing Rules.

We have discussed with the Valuer and reviewed the assumptions based upon which the Valuation Report was prepared. We have also engaged KPMG to report on the arithmetical accuracy of calculations of the forecast used in the Valuation Report and considered the report from KPMG.

Based on the aforesaid, we confirm that the profit forecast as contained in the Valuation Report have been made after due and careful enquiry.

Yours faithfully,

For and on behalf of the board of Directors

Simcere Pharmaceutical Group Limited

Mr. Wan Yushan

Executive Director

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