Announcements and Notices - Discloseable Transaction - Disposal of Shareholding Interest in Magic Holdings International Limited

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Stock Code: 587) DISCLOSEABLE TRANSACTION - DISPOSAL OF SHAREHOLDING INTEREST IN MAGIC HOLDINGS INTERNATIONAL LIMITED

On 19 January 2012, the Vendor sold a total of 150,284,000 MG Shares to the Purchaser, representing approximately 15.000% of the existing issued share capital of Magic Holdings, a listed associate of the Company, at an aggregate cash consideration of approximately HK$450,852,000. The Disposal will be completed not later than three trading days after the trade date on 19 January 2012. Immediately after completion of the Disposal, Magic Holdings will cease to be an associate of the Company.
As certain applicable ratio with respect to the Disposal exceeds 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

INTRODUCTION

On 19 January 2012, the Vendor sold a total of 150,284,000 MG Shares to the Purchaser, representing approximately 15.000% of the existing issued share capital of Magic Holdings, a listed associate of the Company, at an aggregate cash consideration of approximately HK$450,852,000. The Disposal will be completed not later than three trading days after the trade date on 19 January 2012. Immediately after completion of the Disposal, Magic Holdings will cease to be an associate of the Company.

1

THE DISPOSAL

Vendor : Queenherb Enterprises Limited, a wholly-owned subsidiary of the
Company
Purchaser : Baring Private Equity Asia V Holding (1) Limited
To the best of the knowledge, information and belief of the Board after having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are third parties independent of and not connected with any directors, chief executive or substantial shareholders of the Company under the Listing Rules.
Subject Assets : 150,284,000 MG Shares, representing approximately 15.000% of the existing issued share capital of Magic Holdings
Consideration : The consideration for the Disposal was approximately HK$450,852,000, payable in cash, based on a purchase price of HK$3.000 per MG Share, and will be paid by the Purchaser to the Vendor upon completion of the Disposal.
The consideration for the Disposal of HK$3.000 per MG Share represents a premium of approximately 3.448% to the closing price of HK$2.900 on 18 January 2012 and a premium of approximately
98.675% to the book net asset value of HK$1.51 per MG Share as of 30
June 2011 (based on Magic Holdings's audited consolidated net asset value of HK$1,258,032,000 as at 30 June 2011 and its then issued share capital). The above consideration was determined based on arm's length negotiation between the Vendor and the Purchaser.
Completion : The Disposal will be completed not later than three trading days after the trade date on 19 January 2012

2

REASON FOR AND BENEFITS OF THE DISPOSAL

The Company is an investment holding company and its subsidiaries are principally engaged in the research and development, manufacture and sale of gynecological medicine and bio- pharmaceutical products in the PRC.
The Board considers that the Disposal represents a good opportunity for the Group to realize a majority portion of its investment in MG Shares at a profit and believes that the terms of the Disposal are fair and reasonable and the Disposal is in the interests of the Company and its shareholders as a whole.

FINANCIAL EFFECTS OF THE DISPOSAL

After completion of the Disposal, the Group retains 100,167,085 MG Shares, representing approximately 9.998% of the existing issued share capital of Magic Holdings, and Magic Holdings ceased to be an associate of the Company.
The carrying value of the 150,284,000 MG Shares in the book of the Group is approximately HK$188,721,000. Subject to audit (below calculation is for indicative purpose only), it is expected that the Group will recognize a gain of approximately HK$260,131,000 as a result of the Disposal for the year ending 30 June 2012, based on the fact that the carrying value of the 150,284,000 MG Shares in the book of the Group is approximately HK$188,721,000 as at
30 June 2011, and the estimated related expenses in relation to the Disposal is approximately
HK$2,000,000.

USE OF PROCEEDS

It is expected that the proceeds from the Disposal will be applied for development of the
Group's bio-pharmaceutical products and the Group's general working capital purpose.

3

INFORMATION ON MAGIC HOLDINGS

Magic Holdings is an investment holding company whose shares are listed on the Main Board of the Stock Exchange. The principal activities engaged by the subsidiaries of Magic Holdings are research and development, manufacture, sales and marketing of facial masks products and other skincare products in the PRC.
The financial information of Magic Holdings, as extracted from its annual report for the two years ended 30 June 2011 and 30 June 2010, are as follows:

For the year ended 30 June 2011 2010

	HK$'000	HK$'000
Turnover	957,322	631,039
Profit before tax	209,229	142,376
Profit after tax	160,154	117,446
INFORMATION ON THE PURCHASER

The Purchaser is an investment holding vehicle of The Baring Asia Private Equity Fund V, L.P., an Asian regional private equity investment fund.

LISTING RULE IMPLICATIONS

Immediately before completion of the Disposal, the Group held approximately 24.998% of the existing issued share capital of Magic Holdings. After the completion of the Disposal, the Group retains approximately 9.998% of the existing issued share capital of Magic Holdings and Magic Holdings ceased to be an associate of the Company.
As certain applicable ratio with respect to the Disposal exceeds 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

4

DEFINITIONS

In this announcement, unless the context requires otherwise, the following terms have the same meanings as set out below:-
"Board" the board of Directors
"Company" Hua Han Bio-Pharmaceutical Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
"Directors" directors of the Company
"Group" the Company and its subsidiaries
"Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange
"Magic Holdings" Magic Holdings International Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
"MG Share(s)" ordinary share(s) of HK$0.10 each in the issued share capital of
Magic Holdings
"PRC" the People's Republic of China
"Purchasers" Baring Private Equity Asia V Holding (1) Limited
"Stock Exchange" The Stock Exchange of Hong Kong Limited

5

"Vendor" Queenherb Enterprises Limited, a wholly-owned subsidiary of the
Company
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
By order of the Board

Hua Han Bio-Pharmaceutical Holdings Limited Zhang Peter Y.

Chairman

Hong Kong, 19 January 2012

As at the date of this announcement, the Board comprises Mr. Zhang Peter Y., Mr. Deng Jie, Mr. Long Xian Feng and Mr. Zhou Chong Ke as executive Directors, Mr. Wee Ee Lim (Ms. Lim Seok Bin Zann as his alternate) and Mr. Tarn Sien Hao as non-executive Directors, and Professor Kung Hsiang Fu, Professor Tso Wung Wai and Mr. Hon Yiu Ming Matthew as independent non-executive Directors.

6