CStone Pharmaceuticals — Capital/Financing Update 2019

Mar 21, 2019

Unless otherwise defined herein, capitalized terms used in this announcement shall have the same meanings as those defined in the prospectus dated February 14, 2019 (the “ Prospectus ”) of CStone Pharmaceuticals (the “ Company ”).

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) and Hong Kong Securities Clearing Company 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.

This announcement is made pursuant to section 9(2) of the Securities and Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong).

This announcement is for information purposes only and does not constitute an offer or an invitation to induce an offer by any person to sell, acquire, purchase or subscribe for any securities. Potential investors should read the Prospectus for detailed information about the Global Offering described below before deciding whether or not to invest in the Offer Shares.

This announcement is not for release, publication, distribution, directly or indirectly, in or into the United States or any other jurisdiction where such distribution is prohibited by law. This announcement does not constitute and is not an offer to sell or a solicitation of any offer to buy securities in Hong Kong, the United States or elsewhere. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933 (the “ U.S. Securities Act ”) or any state securities laws of the United States and may not be offered or sold in the United States absent registration under the U.S. Securities Act or except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. There will be no public offering of securities of the Company in the United States.

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CStone Pharmaceuticals 基石藥業

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2616)

FULL EXERCISE OF THE OVER-ALLOTMENT OPTION, STABILIZING ACTIONS AND END OF STABILIZATION PERIOD

FULL EXERCISE OF THE OVER-ALLOTMENT OPTION

The Company announces that on March 21, 2019 the Over-allotment Option described in the Prospectus has been fully exercised by the Joint Global Coordinators, on behalf of the International Underwriters, in respect of an aggregate of 27,959,000 Shares (the “ Over-allotment Shares ”), representing approximately 15% of the Offer Shares initially available under the Global Offering before any exercise of the Over-allotment Option, to cover over-allocations in the International Offering.

The Over-allotment Shares will be allotted and issued by the Company at HK$12.00 per Share (exclusive of brokerage of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005%), being the Offer Price per Share under the Global Offering. The Over-allotment Shares will be used to facilitate the return of 27,959,000 borrowed Shares to WuXi Healthcare Ventures II, L.P. (“ WuXi Healthcare Ventures ”), which were used to cover over-allocations of Shares in the International Offering.

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Approval of Listing

Approval for the listing of, and permission to deal in, the Over-allotment Shares has already been granted by the Listing Committee of the Stock Exchange. Listing of, and dealing in, the Over-allotment Shares are expected to commence on the Main Board of the Stock Exchange at 9:00 a.m. on March 26, 2019.

Shareholding structure of the Company upon the full exercise of the Over-Allotment Option

The shareholding structure of the Company immediately before and immediately after the completion of the full exercise of the Over-allotment Option is as follows:

	Immediately	before the	Immediately after the	Immediately after the
	allotment and	issue of the	allotment and	issue of the
	Over-allotment Shares		Over-allotment Shares
		Approximate		Approximate
		percentage		percentage
		of the		of the
		Company’s		Company’s
	Number of	issued share	Number of	issued share
Shareholders	Shares	capital	Shares	capital
WuXi Healthcare Ventures	292,881,444	29.76%	292,881,444	28.94%
Zhengze Yuanshi and its affiliates(1)	136,356,604	13.86%	136,356,604	13.47%
Graceful Beauty Limited	146,950,948	14.93%	146,950,948	14.52%
Director, senior management
and employees(2)	64,170,308	6.52%	64,170,308	6.34%
Other Pre-IPO Investors(3)	157,296,228	15.98%	157,296,228	15.54%
Other public shareholders	186,396,000	18.94%	214,355,000	21.18%
Total	984,051,532	**100% **	1,012,010,532	100%

Notes:

• (1) The affiliates of Zhengze Yuanshi include Oriza Seed Fund I L.P. and Hikeo Biotech L.P.

• (2) Director and senior management include Dr. Frank Ningjun Jiang (who is also the CEO and Chairman of our Board), where, as of the date of this announcement, 6,760,000 Shares are being held by JIANG IRREVOCABLE GIFTING TRUST FBO: YANNI XIAO, Dated November 21, 2018, Dr. Jianxin Yang and Dr. Bing Yuan. Employees who are independent third parties hold Shares directly by themselves or indirectly through Golden & Longevity Portfolios L.P.. This also includes Shares held by CStone Incentivization Limited.

• (3) Other Pre-IPO Investors are independent third parties, the identities of whom are set out under the section headed “History, Development and Corporate Structure – Pre-IPO Investments” in the Prospectus.

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Use of Proceeds

The Company will receive additional net proceeds of approximately HK$325.42 million from the issue of the Over-allotment Shares, after deducting the commissions and other offering expenses payable by the Company in relation to the exercise of the Over-allotment Option, without taking into account of any incentive fee or discretionary reward that the Company may pay to the International Underwriters. The Company intends to apply the additional net proceeds on a pro rata basis for the purposes as set out in the section headed “Future Plans and Use of Proceeds – Use of Proceeds” in the Prospectus.

STABILIZING ACTIONS AND END OF STABILIZATION PERIOD

The Company further announces that the stabilization period in connection with the Global Offering ended on March 21, 2019, being the 30th day after the last day for the lodging of applications under the Hong Kong Public Offering. The stabilizing actions undertaken by Goldman Sachs (Asia) L.L.C., as Stabilization Manager, or any person acting for it during the stabilization period were:

• (1) over-allocations of an aggregate of 27,959,000 Shares in the International Offering, representing approximately 15% of the total number of the Offer Shares initially available under the Global Offering (before any exercise of the Over-allotment Option);

• (2) the borrowing of an aggregate of 27,959,000 Shares by Goldman Sachs International, as an affiliate of the Stabilization Manager, from WuXi Healthcare Ventures pursuant to the Stock Borrowing Agreement to cover the over-allocations in the International Offering. Such Shares will be returned and redelivered to WuXi Healthcare Ventures in accordance with the terms of the Stock Borrowing Agreement; and

• (3) the full exercise of the Over-allotment Option by the Joint Global Coordinators, on behalf of the International Underwriters on March 21, 2019, in respect of an aggregate of 27,959,000 Shares, representing approximately 15% of the total number of Offer Shares initially available under the Global Offering (before any exercise of the Over-allotment Option), at the Offer Price, to facilitate the return to WuXi Healthcare Ventures of all of the borrowed Shares which were used to cover the over-allocations in the International Offering.

PUBLIC FLOAT

Immediately after the completion of the Global Offering and after the full exercise of the Over-allotment Option, the Company will continue to comply with the public float requirements under Rule 8.08(1)(a) of the Listing Rules.

By order of the Board CStone Pharmaceuticals Dr. Frank Ningjun Jiang Chairman

Hong Kong, March 21, 2019

As at the date of this announcement, the Board of Directors of the Company comprises Dr. Frank Ningjun Jiang as Chairman and Executive Director, Dr. Wei Li, Mr. Qun Zhao, Mr. Xiaomeng Tong, Mr. Guobin Zhang and Dr. Lian Yong Chen as non-executive Directors, and Dr. Paul Herbert Chew, Mr. Ting Yuk Anthony Wu and Mr. Hongbin Sun as independent non-executive Directors.

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