Sihuan Pharmaceutical : Voluntary Announcement - Establishment of United States Research and Development Centre

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(incorporated in Bermuda with limited liability)

The board of directors (the "Board") of Sihuan Pharmaceutical Holdings Group Ltd. (the "Company" or "Sihuan Pharmaceutical" together with its subsidiaries, the "Group") announces that the Group has recently set up its United States Research and Development Centre ("U.S. R&D Centre" or the "Center") in the San Francisco Bay Area in California of the United States (the "U.S.") after two years of planning.

The establishment of Sihuan Pharmaceutical's U.S. R&D Centre is an important step on the road to the Group's global strategic planning. As a center of global biomedical technology, the San Francisco Bay Area has a concentration of top talent and advanced concept for innovative drug R&D. The Center will make full use of local talent and contract research organizations, and primarily focus on the development of first-in-class immuno-oncology drugs, including small molecule drugs and large molecule biological drugs such as antibodies and fusion protein drugs. All the researchers and consultants of the Center are senior scientists with extensive experiences in innovative drug R&D. There are multiple projects under development currently.

Sihuan Pharmaceutical's U.S. R&D Centre will work closely with and complement the Group's existing R&D platforms. On one hand, after finishing preclinical research of the drugs in the U.S., the Center will work with the Group's R&D platforms in China, in where sample production and clinical development will be conducted, in order to achieve effective resources utilization. On the other hand, the Center will make flexible adjustments to its R&D strategy based on government

policies, regulations and the market environment. For instance, the Group plans to promote internationalization of its products through commencing clinical trials and registration process in the U.S. and China simultaneously. Meanwhile, it is expected to accelerate marketization of the products in China. This will further enhance the Group's pace and level of innovative drug R&D, thus fulfil unmet clinical demands.

The establishment of Sihuan Pharmaceutical's U.S. R&D Centre leads the Group to the field of biological drug R&D, including antibodies and fusion protein drugs, and connects the Group to global leading R&D resources which boosts the Group's R&D development and is expected to bring high-level international cooperation opportunities, thus pave the way to the Group's international business expansion.

The applicable percentage ratios in respect of the above transaction are less than 5%.

This announcement is being made by the Company on a voluntary basis to let the investing public understand the Group's latest business development, and does not constitute, and is not intended to be, an advertisement regarding the use of any medicine, surgical appliance, treatment or orally consumed product.

Hong Kong, 15 August, 2017

By order of the Board

Chairman and Executive Director

As at the date of this announcement, the executive directors of the Company are Dr. Che Fengsheng (Chairman), Dr. Guo Weicheng (Deputy Chairman and Chief Executive Officer) and Mr. Meng Xianhui; the non-executive directors of the Company are Dr. Zhang Jionglong and Mr. Homer Sun; and the independent non-executive directors of the Company are Mr. Patrick Sun, Mr. Tsang Wah Kwong and Mr. Zhu Xun.