3SBio Inc. — Capital/Financing Update 2016

Mar 29, 2016

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.

3SBIO INC.

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1530)

CONNECTED TRANSACTION IN RELATION TO THE CONVERTIBLE LOAN AGREEMENT

CONVERTIBLE LOAN AGREEMENT

The Board is pleased to announce that on March 29, 2016, Shenyang Sunshine, an indirect wholly-owned subsidiary of the Company, entered into the Convertible Loan Agreement with Zhejiang Sunshine pursuant to which Shenyang Sunshine agreed to make available to Zhejiang Sunshine the Convertible Loan in a principal amount of RMB75,000,000 at an interest rate of 8% per annum, with an option (exercisable at the discretion of Shenyang Sunshine) to convert the Convertible Loan into equity interests in Zhejiang Sunshine.

LISTING RULES IMPLICATIONS

Zhejiang Sunshine is a direct non-wholly owned subsidiary of Ningbo Meishan, following its disposal by the Group to Ningbo Meishan in December 2015. Mr. Lou, one of the controlling shareholders of the Company and therefore a connected person of the Company (as defined in the Listing Rules), is interested in Ningbo Meishan as to approximately 52.1%. Zhejiang Sunshine is therefore regarded as an associate of Mr. Lou and a connected person of the Company (as defined in the Listing Rules). As such, the Convertible Loan Agreement and the transactions contemplated thereunder are considered connected transactions under Chapter 14A of the Listing Rules.

As the highest of the applicable percentage ratios (other than the profit ratios) of the Convertible Loan Agreement and the transactions contemplated thereunder is greater than 0.1% but less than 5% and the Convertible Loan Agreement is entered into on normal commercial terms or better, the Convertible Loan Agreement and the transactions contemplated thereunder are subject to reporting and announcement requirements and are exempt from the circular and independent Shareholders’ approval requirements pursuant to Rule 14A.76(2) of the Listing Rules.

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CONVERTIBLE LOAN AGREEMENT

The principal terms of the Convertible Loan Agreement are summarized below:

Date: March 29, 2016 Parties: (i) The lender : Shenyang Sunshine (ii) The borrower : Zhejiang Sunshine Principal amount: RMB75,000,000 Interest rate: 8% per annum on the outstanding principal amount calculated from the Advance Date to and including the repayment date Advance Date: Within 30 days of signing the Convertible Loan Agreement (i.e. on or before April 28, 2016)

Term of the Convertible 27 months following the Advance Date Loan: Use of the loan: The Convertible Loan shall be used for (i) the acquisition of Liaoning Sunshine Technology and its assets and (ii) funding business operations of Beijing Huansheng (including but not limited to developing its kidney dialysis businesses and building its related business networks)

Conversion right: Shenyang Sunshine shall have an irrevocable right and option to, at any time during the term of the Convertible Loan, and at its sole discretion, convert the Convertible Loan into equity interests in Zhejiang Sunshine on such terms to be agreed between Shenyang Sunshine and Zhejiang Sunshine at the time of conversion.

The Company will make appropriate announcements when the conversion mechanism of the Convertible Loan is agreed between Shenyang Sunshine and Zhejiang Sunshine and (if applicable) upon conversion of the Convertible Loan.

INFORMATION OF ZHEJIANG SUNSHINE

Zhejiang Sunshine was incorporated in the PRC on June 6, 2014. It is being developed as a business platform covering the whole value chain of kidney dialysis services and developing related businesses. As of December 31, 2015, Zhejiang Sunshine had not commenced any business operations since its date of establishment and therefore did not have any assets. The Company understands that after obtaining the Convertible Loan, Zhejiang Sunshine will acquire Beijing Huansheng in order to develop kidney dialysis businesses.

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The Company also understands from Zhejiang Sunshine that on March 24, 2016, Zhejiang Sunshine entered into another convertible loan agreement with Jincheng Bank for a principal amount of RMB225,000,000, at an interest rate of 8% per annum, with an option to convert the convertible loan into equity interests in Zhejiang Sunshine. The purpose and key terms of the loan are the same as those of the Convertible Loan as stated above.

Jincheng Bank is a financial institution that provides deposits, loans, insurance and other financial services at a retail and commercial level.

Zhejiang Sunshine was disposed of by Shenyang Sunshine to Ningbo Meishan for nil consideration in December 2015 as part of the reorganization of the Group. The disposal was made because the Board recognized that (i) businesses offering kidney dialysis services require significant amounts of investment at an early stage and will unlikely earn positive earnings or contribute to the Group’s cash flow within the first three years of establishment, and (ii) kidney dialysis is not the core business of the Company. As such, the Board was of the view that the Company should not include within the Group businesses that provide kidney dialysis services when they are at their infancy.

REASONS FOR AND BENEFITS OF ENTERING INTO THE CONVERTIBLE LOAN AGREEMENT

The Company is a leading biopharmaceutical company in the PRC. The Group has extensive expertise in developing, manufacturing and marketing pharmaceuticals.

Zhejiang Sunshine will be developed as a business platform covering the whole value chain of kidney dialysis services and developing related services.

The Board recognizes the potential for growth in businesses that offer kidney dialysis services and the potential synergy between Zhejiang Sunshine and the Company’s existing business, namely the Company’s existing dialysis centers which contribute to the sales of recombinant human erythropoietin products. As such, the Board is of the view that it would be beneficial for the Company to have the opportunity to invest in Zhejiang Sunshine in the future. The Convertible Loan Agreement offers the Company (i) an opportunity to receive steady interest income from Zhejiang Sunshine when Zhejiang Sunshine’s business is at an early stage, and (ii) the flexibility to acquire equity interests in Zhejiang Sunshine when its business has matured. The Directors therefore consider that the Convertible Loan represents a suitable investment opportunity for the Group.

The Board, including the independent non-executive Directors, considers that the Convertible Loan and the Convertible Loan Agreement are in the ordinary and normal course of business, to be entered into on normal commercial terms or better, and are fair, reasonable and in the interests of the Company and its shareholders as a whole.

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LISTING RULES IMPLICATIONS

Zhejiang Sunshine is a direct non-wholly owned subsidiary of Ningbo Meishan, following its disposal by the Group to Ningbo Meishan in December 2015. Mr. Lou, one of the controlling shareholders of the Company and therefore a connected person of the Company (as defined in the Listing Rules), is interested in Ningbo Meishan as to approximately 52.1%. Zhejiang Sunshine is therefore regarded as an associate of Mr. Lou and a connected person of the Company (as defined in the Listing Rules). As such, the Convertible Loan Agreement and the transactions contemplated thereunder are considered connected transactions under Chapter 14A of the Listing Rules.

As the highest of the applicable percentage ratios (other than the profit ratios) of the Convertible Loan Agreement and the transactions contemplated thereunder is greater than 0.1% but less than 5% and the Convertible Loan Agreement is entered into on normal commercial terms or better, the Convertible Loan Agreement and the transactions contemplated thereunder are subject to reporting and announcement requirements and are exempt from the circular and independent Shareholders’ approval requirements pursuant to Rule 14A.76(2) of the Listing Rules.

As at the date of this announcement, save for Mr. Lou Jing (who is the son of Mr. Lou and therefore is an associate of Mr. Lou) and Mr. Tan Bo (whose wife has an interest in Ningbo Meishan as to approximately 21.7%), none of the Directors has any material interest in the Convertible Loan and the Convertible Loan Agreement, and none of the Directors other than Mr. Lou Jing and Mr. Tan Bo has abstained from voting on the Board resolutions approving the Convertible Loan Agreement and the transactions contemplated thereunder.

DEFINITIONS

“Advance Date” the date on which the Convertible Loan is advanced to Zhejiang Sunshine pursuant to the terms and conditions of the Convertible Loan Agreement

• “Beijing Huansheng” Beijing Huansheng Medical Investment Company Limited ( 北京環 生醫療投資有限公司 ), a company incorporated in the PRC

• “Board”

the board of Directors

• “Company” 3SBio Inc. 三生製藥 , a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of The Stock Exchange of Hong Kong Limited

• “Convertible Loan” the convertible loan in the principal amount of RMB75,000,000 pursuant to the terms and conditions of the Convertible Loan Agreement

• “Convertible Loan the loan agreement dated March 29, 2016 entered into between Agreement” Shenyang Sunshine and Zhejiang Sunshine pursuant to which Shenyang Sunshine agreed to make available to Zhejiang Sunshine the Convertible Loan

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“Director(s)”

the directors of the Company

“Group”	the Company and its subsidiaries
“Jincheng Bank”	Jincheng Bank Co., Ltd. (晉城銀行股份有限公司)
“Liaoning Sunshine	Liaoning Sunshine Science Technology Development Company
Technology”	Limited (遼寧三生科技發展有限公司), a company incorporated in
	the PRC which was disposed of by Shenyang Sunshine and became
	a wholly-owned subsidiary of Beijing Huansheng
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
	of Hong Kong Limited
“Mr. Lou”	Mr. Lou Dan (婁丹), one of the controlling shareholders of the
	Company (as defined in the Listing Rules)
“Ningbo Meishan”	Ningbo Meishan Bonded Port Zone Xinsheng Medical Investment
	Management Partnership (Limited Partnership) (寧波梅山保稅港
	區信生醫療投資管理合夥企業(有限合夥)), a limited partnership
	established in the PRC which holds an approximately 99.9% equity
	interest in Zhejiang Sunshine
“PRC”	the People’s Republic of China and for the purposes of this circular,
	excluding Hong Kong, the Macau Special Administrative Region of
	the People’s Republic of China and Taiwan
“RMB”	Renminbi, the lawful currency of the PRC
“Shareholders”	the holder(s) of the shares of the Company
“Shenyang Sunshine”	Shenyang Sunshine Pharmaceutical Company Limited (瀋陽三生
	製藥有限責任公司), a company incorporated in the PRC and an
	indirect wholly-owned subsidiary of the Company

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“Zhejiang Sunshine”

Zhejiang Sunshine Pharmaceutical Company Limited ( 浙江三生製 藥有限公司 ), a company incorporated in the PRC and a direct nonwholly owned subsidiary of Ningbo Meishan

“%”

percent

By order of the Board 3SBio Inc. Mr. LOU Jing Chairman

Hong Kong, March 29, 2016

As at the date of this announcement, the Board comprises Mr. LOU Jing, Mr. TAN Bo, Ms. SU Dongmei and Mr. HUANG Bin as executive Directors; Mr. LIU Dong and Mr. LV Dong as non-executive Directors; and Mr. PU Tianruo, Mr. David Ross PARKINSON and Mr. MA Jun as independent non-executive Directors.

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