China Shineway Pharmaceutical : Announces Interim Results for the Six Months Ended 30 June 2015 Turnover Rose by 0.9% to RMB1,109 Million Proposed Interim Dividend of RMB11 Cents per Share

GENERAL POSSIBLE QUESTIONS

【For Immediate Release】

中國神威藥業集團有限公司

China Shineway Pharmaceutical Group Ltd.

（股份編號：2877.HK）

Financial Highlights China Shineway Announces Interim Results for the Six Months Ended 30 June 2015 Turnover Rose by 0.9% to RMB1,109 Million Proposed Interim Dividend of RMB11 Cents per Share

RMB Million	For the six months ended 30 June
RMB Million	2015	2014	Changes
Turnover	1,109.3	1,099.4	+ 0.9%
Profit for the period	385.6	404.9	- 4.8%
Basic earnings per share (RMB cents)	47	49
Interim dividend per share (RMB cents)	11	11

RMB Million	For the six months ended 30 June 2015
RMB Million	Sales	Product mix	Changes
Injections	622.1	56.1%	- 0.9%
Soft capsules	253.8	22.9%	+ 2.0%
Granules	193.4	17.4%	+ 5.4%
Other product formats	40.0	3.6%	+ 1.5%

(Hong Kong, 28 August 2015) - China Shineway Pharmaceutical Group Limited, the largest Chinese medicine injections, soft capsules and granules manufacturer, and collectively with its subsidiaries ("China Shineway" or the "Company" and together with its subsidiaries, the "Group", stock code: 2877.HK) today announced its interim results for the six months ended 30 June 2015. During the period under review, the Group recorded a turnover of approximately RMB1,109.3 million (2014: RMB1,099.4 million), representing a rise of 0.9% as compared to the corresponding period of last year. Net profit decreased 4.8% to approximately RMB385.6 million (2014: RMB404.9 million). The decline in profit was mainly attributable to the price adjustment of products and increase in expenses. Basic earnings per share were RMB47 cents (2014: RMB49 cents). As at 30 June 2015, bank deposits of the Group, amounting to RMB2,954.1 million (31
December 2014: RMB2,688.1 million).
The Board of Directors proposed to declare an interim dividend of RMB11 cents per share for the six months ended 30 June 2015 (2014: RMB11 cents), which will be paid on 30 October 2015, to the shareholders whose names appear on the Company's register of members on 16 October 2015.

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China Shineway Pharmaceutical Group Limited

2015 Interim Results

28 August 2015 / Page 2/4

Mr. Li Zhenjiang, Chairman of the Group said, "In recent years, following the extension of medical reform, the coverage of medical insurance expanded, the medicine quality standard system and management were improved constantly, and the relevant medical reform policies issued by the State Council accelerated the development of health service industry, all these indicated a prosperous future of the medical industry development. Following the extension of the new version of Essential Drug List and the supplemental Essential Drug catalogues of provinces, the sales volume in fundamental medical market constantly increases, and the Company will embrace a favorable opportunity for its rapid growth. However, the medical industry also faces uncertainties in many aspects including medical insurance payment system reform, drug price reduction and medical tenders, the future development of medical industry will be full of opportunities and challenges. Therefore, the Group will base on the market and actively respond to changes, integrate resources, constantly innovate and maintain a leading position in the market."

During the first six months of 2015, the Group's prescription and over-the-counter ("OTC") medicines accounted for approximately 77.4% and 22.6% of the Group's turnover respectively. These medicines are primarily applied for the treatments of (i) cardiovascular diseases, respiratory system diseases, colds and fevers, and digestive system diseases that commonly affect the middle and old aged people and children; and (ii) anti-viral medicines. For the first six months of 2015, approximately 44.3% of the. Group's turnover was derived from the products for the treatment of cardiovascular diseases. The products for anti-viral treatment and other products contributed approximately of 29.0% and 26.7% respectively of the Group's turnover.
For the first six months of 2015, the Group sold RMB622.1 million of injection products, representing a decline of 0.9% from the same period of last year. For the first six months of 2015, injection products accounted for 56.1% of the Group's total turnover as compared to 57.1% for the same period of last year. In the first half of 2015, sales of injection products recorded a decrease. This was mainly attributable to the decline in sales of Qing Kai Ling Injection and Shen Mai Injection.
For the first six months of 2015, the Group recorded RMB253.8 million on sales of soft capsule products, elevated by 2.0% from the same period of last year. This was mainly due to the sales of Huo Xiang Zheng Qi Soft Capsule recorded increase as compared to the same period of last year. Soft capsule products accounted for 22.9% of the Group's turnover for the first six months of 2015, as compared to 22.6% for the same period of last year. A smooth growth in soft capsule sales is expected in the future. The Group's production capacity for soft capsule products is presently at 3.5 billion capsules per annum. The Group believes that it is currently the largest Chinese medicine soft capsule manufacturer in the PRC in terms of sales volume and production capacity.
Sales of granule products in the first six months of 2015 had increased by 5.4% as compared to the same period of last year, amounting RMB193.4 million. This was mainly resulted from the sales increase of Pediatric Paracetamol Artificial Cow-bezoar and Chlorphenamine Maleate Granule and Huamoyan Granule. Granule products accounted for 17.4% of the Group's turnover for the first six months of 2015 as compared to 16.7% of the same period of 2014. The Group's production capacity of granule products is currently at 3.4 billion bags per annum. The Group believes that it is the largest Chinese medicine granule products manufacturer in the PRC in terms of sales volume and production capacity.

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China Shineway Pharmaceutical Group Limited

2015 Interim Results

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Sales of other products in the first six months of 2015 had increased by 1.5% as compared to the same period of last year, amounted to RMB40.0 million. The increase was mainly attributable to the increase in sales of hard capsule and ointment products as compared to the same period of last year.
The Group continues to strengthen the protection of its intellectual property rights. As at the date of the Interim Report, the Group has obtained 51 patents for our inventions, and 27 invention patent applications are pending approval. As at 30 June 2015, the Group had 3 products listed as State Protected Chinese Medicines, including Jianzhi Tongluo Soft Capsule, Xuanmai Ganjie Lozenge and Shujin Tongluo Granule.
Looking forward, the Group will consistently implement the following growth strategies, together with the strong management team and the enormous manufacturing capacity to attain higher growth and return:

1) Marketing Strategy: (i) Study health care system reform policy, cope with market changes, strengthen three terminals - hospital, drug store and grass-root medical institution, improve terminal coverage and enhance the productivity of the target terminals. (ii) Integrated commercial channel platforms, sufficiently take advantage of the channel, optimize customer structure and strengthen customer management by objectives. (iii) Make intensive cultivation for grass-root medical terminals and promote the coverage and sales volume of the fundamental pharmaceutical products. (iv) Make innovative breakthrough in the high-end hospitals market, implement refined management, intensify the promotion of new products and raise the hospitals terminal market share. (v) Build OTC professional sale teams in major cities, develop over ten thousands drug stores, strengthen strategic cooperation with retails in major cities, enhance price management and improve the sales volume of terminals. (vi) Focus on over one thousand districts and counties, achieve to cover over ten thousands health centers (communities), drug stores and over one thousand county hospitals and raise terminals coverage. (vii) Strengthen brand construction, integrate media resources, intensify stereo promotion of the online advertisements and implementation of the offline academic and terminal educational activities, comprehensively improve the use efficiency of advertisement resources, and raise the public awareness of our product brand and resource utilization. (viii) Reinforce academic marketing, complete the academic promotion system of full products with academic marketing oriented, and dig the core value of products to improve the strength of our product. 2) Product Strategies: (i) Further increase sales contribution and achieve steady growth in core products (namely Qing Kai Ling Injection, Shen Mai Injection, Shu Xie Ning Injection, Wu Fu Xin Nao Qing Soft Capsule, Huo Xiang Zheng Qi Soft Capsule and Pediatric Qing Fei Hua Tan Granule). (ii) Continue to nurture emerging products (such as Huang Qi Injection, Qing Kai Ling Soft Capsule, Huamoyan Granule, Shujin Tongluo Granule and Jiangzhi Tongluo Soft Capsule) and promote their sales volume. (iii) Strengthen the development of new products on the market, focusing on cultivating exclusive new products, increase efforts to promote and enhance the proportion of sales of new products. (iv) Focus on grass-root, retail and hospital major terminal markets. To deploy product portfolio strategy and implementation of the product development plan.

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China Shineway Pharmaceutical Group Limited

2015 Interim Results

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3) Merger, Acquisition and Investment Strategies: (i) Leverage on the favorable opportunity that the extensive reform in pharmaceutical market and the implementation of new version of GMP speed up the upgrading of the transformation, in virtue of the resource advantage of the Group's brand, sales network and management experiences, rapidly offset the inadequacies in the Group's existing products and production capacity, and integrate the market resources, so as to drive the rapid development of the Group. (ii) Strengthen and diversify the product line of the Group, actively seek and merge those products with market potential, and build series of product groups of tumour medicines, cardiovascular medicines, diabetes medicines, anti-viral medicines and gynecological drugs, etc. (iii) Extend new areas for prescriptive Chinese medicine granules, we have completed the research work on the preparing technology and quality standard required by the State Administration of Traditional Chinese Medicine for over 600 kinds of prescriptive Chinese medicine granules which are also eligible to be used clinically by medical units above the county level in Hebei Province, and will be a new growth point of our business.

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About China Shineway Pharmaceutical Group Limited (Stock Code: 2877)

China Shineway Pharmaceutical Group Limited is one of the largest modern Chinese medicines manufacturers in the PRC. The Group is listed on the Main Board of Hong Kong Stock Exchange and is also a Hang Seng Composite Index constituent. After the "Shineway" trademark was named as China Famous Trademark, our "Wu Fu" trademark and "Shen Miao" trademark were subsequently identified as China Famous Trademarks, We became the first one in Hebei Province having three China Famous Trademarks. In addition, our "Bei Si" and " Zhikeping" trademark was also awarded as Hebei Province Famous Trademark.

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