Sihuan Pharmaceutical Announces 2013 Interim Results

             Sihuan Pharmaceutical Announces 2013 Interim Results

Net Profit Up 33.8% to Approximately RMB617.5 Million

Picks Up Growth Momentum with Successful Internal Integration

R&D Enters Harvest Period

Important Exclusive Innovative Drugs Slated to be Launched from 2015 Onwards

PR Newswire

HONG KONG, Aug. 26, 2013

HONG KONG, Aug. 26, 2013 /PRNewswire/ -- Sihuan Pharmaceutical Holdings Group
Ltd. (HKEx: 0460) ("Sihuan Pharmaceutical" or the "Company"), a leading
pharmaceutical company with the largest cardio-cerebral vascular ("CCV") drug
franchise in China's prescription drug market, today announced its interim
results for the six months ended 30 June 2013 ("1H2013" or "review period").

Financial Highlights

                 For the Six Months Ended 30 June
Key Income Statement Items     RMB Million     Change %
                               2013    2012
Revenue                        2,324.7 1,389.3 +67.3%
Gross Profit                   1,847.1 1,071.4 +72.4%
Profit Attributable to Owners  617.5   461.4   +33.8%
of the Company
Dividend per Share (RMB Cents) 4.3     3.1     N/A

With its successful internal adjustment in 2012 that strengthened its
operational efficiency as a whole, coupled with the rebounds of its key
products Kelinao and Oudimei and rapid growth of its fast-growing promising
products such as Yuanzhijiu, Yeduojia and Danshen Chuangxiongqin, Sihuan
Pharmarceutical recorded a revenue of RMB2,324.7 million, a significant
increase of 67.3% year-on-year. The sales contribution from products launched
after the Company's listing in 2010 continued to expand, reaching
approximately 60% of total revenue. Gross profit surged by 72.4% to RMB1,847.1
million during the review period, while profit attributable to owners of the
Company grew by 33.8% to RMB617.5million. The Board of Directors recommended
an interim dividend of RMB 4.3 cents per share (2012: RMB3.1cents)

Dr. Che Fengsheng, Chairman and CEO of the Company,  said, "In the first half
of 2013, Sihuan Pharmaceutical further consolidated its well-established lead
in the CCV drugs market and became the third largest pharmaceutical company in
the Chinese prescription drug market. Momentum in growth in the Company's
business picked up, which was the culmination of the ability of our extensive
product portfolio to bring us a balanced contribution and sustainable growth.
Together with our competitive edges developed over the previous years, we are
well-positioned to weather the challenges arising from the external policy
changes and market competition. More importantly, after the completion of our
internal integration during the past 2 years, as well as having experienced
various challenges in the past, Sihuan Pharmaceutical has become more mature
and stable, with its overall competitive strengths significantly enhanced."

Rebounds of Key CCTV Products and Rapid Growth of Fast-growing Promising
Products Boosted Strong Growth in Sales

CCV Products

Thanks to a young and diversified product portfolio, sales of CCV products
grew 73.4% to RMB2,214.7 million during the review period, which accounted for
95.3% of total revenue, and again making CCV products the Company's largest
revenue contributor. The Company achieved significant improvement in sales of
Kelinao and Oudimei, its two major exclusive products. As the Company stepped
up its support to its distributors for academic promotion and deepened its
penetration into third to fourth tier cities, sales of Kelinao increased by
32.1% year-on-year. As for Oudimei, the Company was able to deepen penetration
in existing markets and expand into new markets by winning tenders at stable
price levels in more provinces, and supplementary tender submissions in
provinces where tenders were delayed. As a result, sales of Oudimei jumped
140.1% year-on-year in the first half of 2013.

Moreover, sales of the Company's two other exclusive products, Yuanzhijiu and
Yeduojia, maintained rapid sales growth during the period, with sales of the
products up 120.8% and 560.9% to RMB202.0 million and RMB129.4 million,
respectively. Sales of the Company's other promising products, namely Danshen
Chuanxiongqin injection, Guhong injection and Yimaining, also grew
significantly by 157.2%, 109.6% and 53.3% to RMB 57.1 million, RMB151.2
million and RMB92.7 million, respectively. Meanwhile, the Company's
established products such as Chuanqing, Qu'Ao, Qingtong and GM1 recorded
steady sales growth on the back of deepened market penetration, especially
into low-end markets.

Non-CCV Products

The increasingly fierce price competition in the Chinese market of
non-exclusive products led to relatively lower sales volume of the Company's
non-CCV products, which are predominantly non-exclusive drugs. Nevertheless,
sales of and Zhuo'Ao increased by 59.1% and 21.8% respectively.

Clear sales and marketing strategies achieved positive results

During the Period, the Company stepped up its academic promotion work as well
as boosted incentives to distributors for Kelinao and Oudimei, thereby
encouraging more frequent promotion of our products and increasing clinical
use. In the meantime, the company speeded up market penetration of Oudimei by
provincial tender wins and supplementary tender submissions in provinces where
tenders were delayed. As a result, the Company successfully accelerated the
sales rebound of Kelinao and Oudimei. On the other hand, the Company achieved
satisfying results through appropriate tender strategies for each product,
depending on competitiveness of their markets and their level of maturity in
different markets. For products at earlier stages of development and are
exclusive or have fewer competitors, the Company expanded market coverage by
provincial tender wins and supplementary tender submissions in provinces where
tenders were delayed. For non-exclusive products, the Company strategically
expanded its access to low-end markets with EDL ("Essential Drug List") tender
wins and participation in the rural cooperative medical scheme.

New products development enter into the harvest period

Since Xuanzhu Pharma Co., Ltd. becoming a wholly-owned subsidiary of the
Company in 2012, the Company achieved a number of breakthroughs by leveraging
its effective resources integration. To date, the Group has received Approval
for Clinical Trials for a total of five Category 1 innovative drugs from the
China State Food and Drug Administration ("CFDA"), including, Benapene,
Imigliptin Dihydrochloride and Anaprazole Sodium. In addition, L-Phencynonate
Hydrochloride, a Category 1 innovative drug, and Cinepazide Mesilate, a
Category 4 exclusive new drug are progressing as planned. The collaborative
development project with NeuroVive, innovative CCV drugs CicloMulsion and
Neurostat, are in progress as planned towards clinical trials. CicloMulsion is
filing application for Approval for Clinical Trials in China.

For the aspect of generic drugs, after gaining production licenses for
Roxatidine, a first-to-market exclusive generic drug, and Nalmefene
Hydrochloride Injection, a Category 3.1 generic drug, the products
successfully passed final inspections and were officially launched.
Development of other Category 3.1 generic drugs in the pipeline such as
Levetiracetam injection, Lacosamide, and Aprepitant are also in progress as
planned. Including these three drug development projects, the Group has a
total of 17 Category 3.1 first-to-market generic drug projects under
development. In addition, production license applications were filed for two
other generic drugs during the Period and approvals from CFDA are expected to
be issued by the end of 2013.

Production and Quality Management

In compliance with the new Good Manufacturing Practice ("GMP") standards,
upgrades of the Company's production bases in Beijing, Jilin and Liaoning are
approaching completion. The Group plans to apply for new GMP standard
certification in September 2013. The Company's Active Pharmacentical
Ingredients production facility, Langfang Gaobo Jingband established
cooperation with the largest Canadian-owned pharmaceutical company Apotex Inc.
during the Period. More importantly, the production facility passed on-site
inspection by the Food and Drug Administration ("FDA") of United States in
July 2013. EIR from FDA is expected to be issued in the third quarter of 2013
representing FDA's approval of its GMP operation system that its products can
be exported to the US.

Future Prospects

Looking ahead, the development of the Chinese pharmaceutical market in the
second half of 2013 will continue to be driven by the expansion of national
medical insurance coverage, the rising per capita subsidy standard for medical
insurance and the increasing maximum reimbursements ratio for medical
treatment, in addition to the accelerated pace of urbanization and China's
ageing population. The Company believes that the pharmaceutical industry will
remain one of the fastest-growing industries in the country. Consolidation in
the industry is intensifying due to medical reform, tightening control of
hospital medical budget, spiralling price competition and the implementation
of the new GMP standard. Nonetheless, these changes will benefit the Company
comprising companies with strong R&D capabilities, a balanced product
portfolio, distinguished sales and marketing capabilities, and an efficient
production system, by being in a better position in grasping rising
opportunities in the market.

Leveraging its outstanding product portfolio, with all six key products and
potential blockbuster being exclusive products, coupled with over ten products
with exclusive formulations or dosages which have been included in the
recently expanded national EDL, and products such as Kelinao, Yuanzhijiu and
Chuanqing recently added to the Guangdong EDL, the Company is expected to
sustain business growth for the Company in the coming five years. In addition,
the Company's long-term growth momentum will be supported by a variety of
innovative patented drugs and first-to-market generic drugs under development.
These products are expected to be launched starting from 2015.

In view of strong future growth, the Company will continue to enhance its
nationwide distribution network and sales and marketing capabilities.
Meanwhile, the Company will continue to exploring opportunities and enhancing
its R&D capability by continuous investment in order to sustain healthy and
sustainable growth.

Dr. Che concluded, "Despite increasingly rigid demand in the pharmaceutical
industry, changes in policies and intense market competition continue to pose
challenges to the industry's development. As an innovative pharmaceutical
company which focuses on exclusive and proprietary products, Sihuan
Pharmaceutical has sharpened its advantage in resources amidst the challenging
market environment. Backed by its outstanding capabilities in sales and
marketing, R&D and resource integration, Sihuan Pharmaceutical is poised to
capitalize on the trend of industry consolidation and to achieve sustainable
development going forward. I am highly confident in Sihuan's 2013 full year
operating results and the Company's future development, and firmly believe
that it will welcome a new era of development by entering into a steady growth
trajectory. We are taking concrete steps towards our goal of becoming the most
competitive Chinese pharmaceutical company."

About Sihuan Pharmaceutical Holdings Group Ltd.

Founded in 2001, Sihuan Pharmaceutical Holdings Group Ltd. is a leading
Chinese pharmaceutical corporation and the largest cardio-cerebral vascular
drug franchise in China's prescription drug market by market share. The
Company also became the third largest pharmaceutical company in terms of
hospital purchase in the Chinese prescription drug market in the first half of
2013. The success of the Group can be attributed to its differentiated and
proven sales and marketing model, extensive nationwide distribution network,
young and diversified product portfolio, and strong R&D capabilities. The
company's current products encompass the top five medical therapeutic areas in
China: cardio-cerebral vascular system, central nervous system, metabolism,
oncology and anti-infectives. Their major products such as Kelinao, Oudimei,
Yuanzhijiu, Yeoduojia, GM1 and Chuanqing are widely used in the treatment of
various cardio-cerebral vascular diseases.

SOURCE Sihuan Pharmaceutical Holdings Group Ltd.

Contact: Hill+Knowlton Strategies Asia, Angela Kung, +852-2894-6374 /
+852-6017-7030,; Crystal Yip, +852-2894-6211 /
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