Shanghai Pharmaceuticals : ·clarification announcement

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)

It was recently reported by media reports that Shanghai Pharmaceuticals Holding Co., Ltd. (the "Company") proposed to bid to acquire Arbor Pharmaceuticals (''Arbor'' or the "Target Company"). After enquiry on the contents of the media reports, the Company wishes to clarify as follows:

1. THE NON-BINDING PROPOSAL

   On 19 July 2017, the Company made a non-binding proposal (the ''Non-binding Proposal'') to Arbor in relation to the proposed participation in the bidding for part of the equity interests in Arbor (the "Project"). Considering that, as at the date of this announcement, the Project is still in a bidding process on a non-exclusive basis and is subject to relatively high degree of uncertainty, and it involves trading secrets and confidentiality requirements under the bidding process, the detailed matters of the Project cannot be disclosed. If the Project has any subsequent material development, the Company will fulfill its information disclosure obligations in a timely manner in accordance with the laws and regulations as well as the listing rules based on the development of the Project.

2. INFORMATION OF THE TARGET COMPANY

   Arbor, with its headquarters based in Atlanta, Georgia, the United States of America, is an integrated pharmaceutical company principally engaged in the research and development and manufacturing of specialty drugs (including cardiovascular, neurological, pediatric, inpatient prescription drugs) and generic drugs.

3. IMPACT ON THE COMPANY

Internationalisation is a strategic focus of the Company, and the Company continuously focuses on identifying acquisition opportunities for quality overseas assets. Arbor fits the Company's

internationalisation strategy. The business operations of the Company are in normal condition. The Project does not involve any material asset restructuring of the Company, nor does it involve any acquisition or disposal of assets, investment or other matters that need to be brought to the general meeting for consideration and approval. Considering that the Project is still in a bidding process on a non-exclusive basis as at the date of this announcement, there is relatively high degree of uncertainty in respect of its impact on the Company.

Investors are advised that the websites of the Shanghai Stock Exchange (http://www.sse.com.cn) and The Stock Exchange of Hong Kong Limited (http://www.hkexnews.hk), Shanghai Securities News and Securities Times are the designated media for disclosing information about the Company. Please refer to the information published by the Company on these media for any information about the Company. Investors are advised to exercise caution with their investment and be cautious of the risks associated with their investment.

By order of the Board

Chairman

Shanghai, the PRC, 14 August 2017

As of the date of this announcement, the executive directors of the Company are Mr. CHO Man, Mr. LI Yongzhong and Mr. SHEN Bo; the non-executive directors are Mr. ZHOU Jun and Ms. LI An; and the independent non-executive directors are Mr. WAN Kam To, Mr. TSE Cho Che, Edward, Mr. CAI Jiangnan and Mr. HONG Liang.

* For identification purpose only