DISCLOSEABLE TRANSACTION: DISPOSAL OF APPROXIMATELY 11% OF THE ISSUED SHARE CAPITAL OF THE TARGET

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New Ray Medicine International Holding Limited

新銳醫藥國際控股有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 6108) DISCLOSEABLE TRANSACTION: DISPOSAL OF APPROXIMATELY 11% OF THE ISSUED SHARE CAPITAL OF THE TARGET THE DISPOSAL UNDER THE OFFER

The Board wishes to announce that on 24 August 2017, China New Rich, a wholly- owned subsidiary of the Company, accepted the Offer, pursuant to which China New Rich tendered to the Offeror all the 86,700,000 Target Shares currently held by it, at the Offer Price of HK$0.51 per Target Share for a total Consideration of HK$44,217,000.

The Target is a company incorporated in the Cayman Islands and continued in Bermuda with limited liability and its shares are currently listed on GEM. The Target Group is principally engaged in (i) the manufacture, research and development, sale and distribution of health related and pharmaceutical products in the PRC and Hong Kong; (ii) the provision of medical laboratory testing services and health check services in Hong Kong; and (iii) the trading of securities in Hong Kong. The Target Group is also engaged in the research and development, manufacture and distribution of branded cosmetic products through a joint venture in Switzerland.

After the completion of the Disposal, the Company will cease to have any interest in the Target.

IMPLICATIONS UNDER THE LISTING RULES

As the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Disposal is more than 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under the Listing Rules and is therefore subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

INTRODUCTION

On 31 July 2017, the Offeror announced the Offer for all the Target Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it), at an Offer Price of HK$0.51 per Target Share.

The Board wishes to announce that on 24 August 2017, China New Rich, a wholly-owned subsidiary of the Company, accepted the Offer, pursuant to which China New Rich tendered to the Offeror all the 86,700,000 Target Shares currently held by it, at the Offer Price of HK$0.51 per Target Share for a total Consideration of HK$44,217,000.

THE DISPOSAL UNDER THE OFFER

The major terms of the Disposal under the Offer are set out below:

Date of acceptance:

24 August 2017

Parties:

Seller: China New Rich, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

Purchaser: Genius Lead Limited, a company incorporated in Samoa with limited liability and the Offeror under the Offer

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, as at the date of this announcement, (i) the Offeror is principally engaged in investment holding; and (ii) the Offeror and its ultimate beneficial owners are Independent Third Parties.

Subject shares:

86,700,000 Target Shares currently held by China New Rich, representing approximately 11% of the issued share capital of the Target as at the date of this announcement.

Acceptance period and announcement of the results:

The acceptance period for the Offer began on 7 August 2017 and will end at 4:00 p.m. on 28 August 2017. The results of the Offer as well as the number of the Target Shares held by the Offeror following the completion of the Offer will be announced by 7:00 p.m. on 28 August 2017 on the website of the Stock Exchange.

Consideration and payment terms:

In accordance with the Composite Document, the Offer Price is HK$0.51 per Target Share which is equivalent to the sale price per Target Share paid by the Offeror to China Wah Yan Healthcare Limited (stock code: 648) under the sale and purchase agreement dated 15 June 2017 entered into between themselves.

The Consideration is HK$44,217,000. In accordance with the Composite Document, the Consideration, less seller's ad valorem stamp duty payable by China New Rich, will be paid in cash to China New Rich as soon as possible but in any event within seven business days after the date on which the form of acceptance and the relevant document(s) of title are received by the branch share registrar and transfer office of the Target in Hong Kong to render such acceptance complete and valid.

Completion:

In accordance with the Composite Document, the Offer is unconditional.

After the completion of the Disposal, the Company will cease to have any interest in the Target.

INFORMATION ON THE TARGET GROUP

The Target is a company incorporated in the Cayman Islands and continued in Bermuda with limited liability and its shares are currently listed on GEM. The Target Group is principally engaged in (i) the manufacture, research and development, sale and distribution of health related and pharmaceutical products in the PRC and Hong Kong; (ii) the provision of medical laboratory testing services and health check services in Hong Kong; and (iii) the trading of securities in Hong Kong. The Target Group is also engaged in the research and development, manufacture and distribution of branded cosmetic products through a joint venture in Switzerland.

The audited financial information of the Target Group for the two years ended 31 December 2016 respectively are as follows:

For the year ended	For the year ended
31 December 2015	31 December 2016
HK$'000	HK$'000
(approximately)	(approximately)

Revenue	34,127	86,565
Loss before tax	(60,040)	(95,139)
Loss for the year from continuing operations	(59,651)	(95,618)
(Loss)/profit for the year from
discontinued operation	(8,109)	35,526
Loss for the year	(67,760)	(60,092)

As at 30 June 2017, the unaudited consolidated total asset value and net asset value of the Target were approximately HK$317,521,000 and HK$270,706,000 respectively.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Group is principally engaged in the trading of pharmaceutical products in the PRC.

The Group expects to recognise an unaudited gain of approximately HK$10.81 million from the Disposal, being the difference between the Consideration, and the original acquisition cost and the estimated expenses in connection with the Disposal. The actual gain or loss in connection with the Disposal will be assessed after completion and is subject to audit.

The Directors expect that the net proceeds from the Disposal, after deducting the expenses directly attributable thereto, will be approximately HK$44.17 million, which will be used for general working capital of the Group. The Disposal represents a good opportunity for the Group to realise its investment in the Target Shares and to enhance the liquidity of the Group.

The Directors (including the independent non-executive Directors) are of the view that the terms of the Disposal under the Offer (including the Consideration) are on normal commercial terms and are fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Disposal is more than 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under the Listing Rules and is therefore subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.