【For Immediate Release】

中國神威藥業集團有限公司
China Shineway Pharmaceutical Group Limited
（Stock code: 2877）

China Shineway Earnings Declined but Exceeded Market Expectations
Increase in Dividend Payout with Positive Outlook in 2018

Financial Highlights

(Hong Kong, 29 March 2018) ---- The largest Chinese medicine injections, soft capsules and granules manufacturer, China Shineway Pharmaceutical Group Limited ("China Shineway"), and collectively with its subsidiaries ("the Group") (SEHK code: 2877) today announced its annual results for the year ended 31 December 2017 ("the year under review"), of which, the Group recorded a turnover of RMB1,920 million (2016: RMB1,993 million), representing a decrease of 3.7% as compared to last year. Profit for the year decreased by 23.4% to RMB452 million (2016: RMB589 million). Basic and diluted earnings per share were RMB55 cents (2016: RMB71 cents). As at 31 December 2017, bank balances and cash was recorded at RMB3,532 million (2016: RMB3,218 million), and no bank loan.

The Board of Directors proposed that a final dividend of RMB12 cents (2016: RMB12 cents) per share and a special dividend of RMB9 cents (2016: RMB9 cents) per share to be paid. Dividend payout ratio increase 29.1% to 58.2% (2016: 45.1%). Cash per share increased 17.6% to HKD5.13 per share (2016: HKD4.36 per share), while net assets per share increased 10.8% to HKD8.45 per share (2016: HKD7.62 per share). Management proposed final and special dividend and increased dividend payout ratio as if 2017 profit remained the same as 2016.

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China Shineway Pharmaceutical Group Limited
2017 Annual Results
29 March 2018 / Page 2/2

TCM formula granules was the fastest growing product format of the Group in 2017, with sales reaching RMB132 million, up 273.0% as compared to the previous year. In 2017, the sales network of the Group's TCM formula granule products covered over 100 TCM hospitals in Hebei Province with coverage ratio about 70%. During the year, most of the Group's TCM formula granule products were sold in more than 100 TCM hospitals in Hebei Province. The Group is expanding the sales coverage of TCM formula granule products in other hospitals across Hebei Province, accelerating the products' entry into other provinces, and expediting the expanding of its sales team at the end-market, with the goal of pushing forward TCM formula granules to become another strong growth potential product of the Group.

The recent changes in business environment of the pharmaceutical industry are turning into catalysts for the Group's business growth in the next few years. The centralized drug procurement practice unbuckles procurement decisions from purely based on the lowest price. Instead, procurement decisions become leaning to "direct web-listing" quotations where both quality and cost effectiveness count. As a result, the Group is able to gradually tune drug prices to a more reasonable and yet competitive level. According to data from an independent research report, the total market value of grassroots public medical institutions represents an annual growth rate of 23.7% since 2010. At present, a number of provinces and capital cities have started merging the urban and municipal medical insurance until new farm village cooperative medical insurance. Essentially, it is a general alignment of the scope of medicines purchased by grassroots medical institutions, with those procured online by class II and III hospitals in relevant provinces and cities, to effect the sharing of one single drug reimbursement list for all public medical institutions. Moreover, the Group expects the possible removal of reimbursement restrictions for Chinese medicine injections in more provinces following Beijing and 4 provinces. The severe flu epidemic made the supply of Qing Kai Ling Injection run short, rekindling the demand for TCM injections which may resume the growing momentum in 2018.

The Group's management comments that, "Changes in the environment around the national medical industry is leading the centralized drug procurement practice to be healthier. The Group can now re-tap to provinces and cities due to the irrationally low prices as set by some tenders in the past. It is expected that the average prices and sales volume of a diversity of products of the Group will increase. The Group has laid the foundation for promoting the strategic transformation of sales and marketing model in 2018, gradually shifting from being distributor-channel-driven to all-terminal driven. We began to use a management system named "Amoeba" to encourage our sales teams and other operation departments to deliver sustainable growth, allowing sales teams and most departments to dwell on how to play out their full capabilities. The Group believes that by these strategies, along with the steadily progress of establishing direct channels to hospitals and pharmacies, the Group will unleash the huge market potential of its orally taken products,　which will enter into a path of rapid growth."

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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 in 2002, 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 were also awarded as Hebei Province Famous Trademark.

Media Contact:
Jovian Communication │ Angel Yeung │ Tel：(852) 2581 0168 │shineway@joviancomm.com