Shanghai Pharmaceuticals : ·DISCLOSEABLE TRANSACTION

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.

上海醫藥集團股份有限公司

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 02607)

The Board of the Company is pleased to announce that, on 15 November 2017, Century Global, a wholly-owned subsidiary of the Company, entered into the Stock Purchase Agreement with Cardinal Cayman, pursuant to which Century Global agreed to purchase, and Cardinal Cayman agreed to sell, the entire equity interest in Cardinal Malaysia for a Reference Final Payment of US$557 million.

Such Reference Final Payment is estimated based on the Base Payment of US$1,200 million, the price adjustment as described in this announcement below and the financial statements of Cardinal Malaysia for the year ended 30 June 2017.

Century Global will satisfy the purchasing payment for the Proposed Acquisition by financing from third party financial institutions.

According to the Hong Kong Listing Rules, as the applicable percentage ratios for the Proposed Acquisition exceed 5% but are less than 25%, the Proposed Acquisition is subject to the announcement requirement but exempted from the shareholders' approval requirement under Chapter 14 of the Hong Kong Listing Rules.

HKG4428126/18 156761-0005 1

AS_ACTIVE:34077354277088.0003

1. STOCK PURCHASE AGREEMENT

   On 15 November 2017, Century Global entered into the Stock Purchase Agreement with Cardinal Cayman (i.e. the Seller), pursuant to which Century Global agreed to purchase, and Cardinal Cayman agreed to sell, the entire equity interest in Cardinal Malaysia for a Base Payment of US$1,200 million, subject to the price adjustment as described in this announcement. As at the date of this announcement, the Proposed Acquisition has been approved by the tenth meeting of the sixth session of the Board of the Company. The Proposed Acquisition is still subject to the anti-monopoly examination for undertaking concentration by the Ministry of Commerce of the PRC.

   The principal terms of the Stock Purchase Agreement are set out below:

2. Date

   15 November 2017

3. Parties

   Purchaser	:	Century Global
   Seller	:	Cardinal Cayman
   To the best of the knowledge, information and belief of the Directors of the Company, after having made all reasonable enquiries, the Seller (and the ultimate beneficial owners of the Seller) is a third party independent of the Company and not a connected person of the Company.

4. The Transaction Structure

   Subject to the terms and conditions of the Stock Purchase Agreement, Century Global agreed to purchase, and Cardinal Cayman agreed to sell, the entire equity interest in the Target Company (i.e. Cardinal Malaysia). Upon Closing of the Proposed Acquisition, Century Global will indirectly own all Chinese business entities ("Cardinal China") established by Cardinal Malaysia in the PRC and Hong Kong.

   Prior to the Proposed Acquisition, Cardinal Malaysia's shareholding structure is as follows:

   Upon Closing of the Proposed Acquisition, Cardinal Malaysia's shareholding structure will be as follows:

5. Consideration for the Proposed Acquisition

   The base payment for the Proposed Acquisition shall be US$1,200 million (the "Base Payment").

   The Final Payment will be determined based on the following formula: (a) the Base Payment of US$1,200 million; plus (b) the Adjustment Amount (as defined below, which may be a positive or negative number or zero); plus (c) the closing cash

   amounts of the Target Company on the Closing Date; minus (d) the Funded Debt of the Target Company that will exist on the Closing Date, and minus (e) the collective indebtedness amount of the loans between the Target Company and the Seller (or any of the affiliates of the Seller other than the Target Company) (the "Shareholder Loans").

   According to the Stock Purchase Agreement, Adjustment Amount means the difference (where applicable) between the working capital of the Target Company and the targeted working capital that decided by both parties.

   The Final Payment shall be determined in accordance with the adjustment formula as described in this announcement, the Company will make an announcement of the Final Payment as and when appropriate when the amounts of such payments have been determined in accordance with the terms and conditions of the Stock Purchase Agreement.

   The Company estimated that the Final Payment would be approximately US$557 million (the "Reference Final Payment") which is based on the financial statements of Cardinal Malaysia for the year ended 30 June 2017 and the adjustment as described in this announcement. The Reference Final Payment shall be approximately 2.1 times of the net asset value of the Target Company as of 30 June 2017, 28.2 times of the net profit of the Target Company for the financial year ended 30 June 2017. Enterprise value of the Target Company shall be approximately 14.7 times of EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization).

   Century Global will satisfy the purchasing payment for the Proposed Acquisition by financing from third party financial institutions.

6. Basis of Consideration

   The consideration for the Proposed Acquisition has been determined through several rounds of arm's length negotiations during an open bidding process between Century Global and Cardinal Cayman, taking into account the factors including, but not limited to, the assessment of the historical financial performance of the Target Company, the market scarcity, the future growth prospects and the potential synergies with the Company.

7. Payment Method and Payoff Arrangement

   Pursuant to the Stock Purchase Agreement, the Purchaser shall deposit a deposit amount of US$100 million into the escrow account.

   In addition, at least five business days prior to Closing, the Seller shall deliver, or cause to be delivered to the Purchaser, duly executed payoff letters in respect of the collective indebtedness amount of the Shareholder Loans (including interest amount). The Shareholder Loans amounted to approximately US$295 million. At the Closing, the Purchaser shall cause to be paid in full the indebtedness amount of the Shareholder Loans to the Seller or its affiliates, in accordance with the terms of the payoff letters.

8. Conditions Precedent of Closing