Acquisition of 100% Equity Interest in Sinopharm Traditional Chinese Medicine Lengshuijiang Pharmaceutical Co., Ltd

Company News

The Group through its wholly-owned subsidiary, Kangzhe (Hunan) Medical Co., Ltd, has successfully acquired 100% equity interest in Sinopharm Traditional Chinese Medicine Lengshuijiang Pharmaceutical Co., Ltd with a total consideration of RMB 81,100,000 which was published listed in China Beijing Equity Exchange and executed electronically over the internet on 5 February 2013.

Mr. Chen Hongbing, on behalf of the Group, signed a Property Rights Transfer Agreement with Sinopharm Traditional Chinese Medicine Co., Ltd. on 21 February 2013.

The completion of the transfer has taken place when the Group completed the relevant share transfer registration procedures and acquired the new business license on 28 February 2013.

Through the acquisition, the Group successfully acquired the product rights of GanFuLe, and this was an effective attempt at securing the control rights of products through gaining equity control of upstream enterprises.

After the successful acquisition, the Group will conduct a comprehensive and systematic marketing plan for GanFuLe, re-position and re-development of the product, and increase the resource and market investments for this product to facilitate the product development. After the acquisition has been completed,
the product will still be promoted through the Direct Network (which in Shenzhen Kangzhe Pharmaceutical Co., Ltd) in certain existing key markets, as well as promoted and sold through the Group’s Agency Network (which in Tianjin Kangzhe Pharmaceutical Technology Development Co., Ltd) in other markets. The Group will continuously utilise its academic promotion strength to provide the product with premium academic support, and through various academic activities and clinical studies to actively improve the product’s brand image. After the re-positioning and reasonable allocation of the Group’s resources, the product will be one of the key products for the Group.