PegBio Co., Ltd. - Capital/Financing Update 2011

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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

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**BEIJING YU SHENG TANG PHARMACEUTICAL GROUP LIMITED 北京御生堂藥業集團有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

PROPOSED SHARE CONSOLIDATION; PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; CHANGE IN BOARD LOT SIZE; AND

PROPOSED RIGHTS ISSUE ON THE BASIS OF FIVE RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE WITH BONUS WARRANTS ON THE BASIS OF ONE BONUS WARRANT FOR EVERY FIVE RIGHTS SHARES TAKEN UP

UNDERWRITERS CHUNG NAM SECURITIES LIMITED GLOBAL WEALTHY LIMITED

PROPOSED SHARE CONSOLIDATION

The Company intends to put forward a proposal to the Shareholders to effect the Share Consolidation which involves the consolidation of every ten issued Shares of HK$0.01 each into one issued Consolidated Share of HK$0.10 and the consolidation of every ten unissued Shares of HK$0.01 each into one unissued Consolidated Share of HK$0.10. As at the date of this announcement, the Company had an authorised share capital of HK$100,000,000 divided into 10,000,000,000 Shares of HK$0.01 each, of which 4,942,175,712 Shares have been issued. Upon the Share Consolidation becoming effective, the authorised share capital of the Company will be at HK$100,000,000 divided into 1,000,000,000 Consolidated Shares of HK$0.10 each, of which up to 494,217,570 Consolidated Shares will be in issue.

For identification purpose only

INCREASE IN AUTHORISED SHARE CAPITAL

The Company proposes to increase the Company’s authorised share capital (on the basis of the Share Consolidation having become effective) from HK$100,000,000 divided into 1,000,000,000 Consolidated Shares to HK$1,000,000,000 divided into 10,000,000,000 Consolidated Shares by the creation of an additional 9,000,000,000 unissued Consolidated Shares which shall rank pari passu in all respects with the then existing Consolidated Shares. The Increase in Authorised Share Capital is subject to and conditional upon the Share Consolidation becoming effective and the passing of an ordinary resolution by the Shareholders at the SGM.

CHANGE IN BOARD LOT SIZE

The board lot size for trading in the Shares is 8,000 Shares at present. The Company proposes to change the board lot size for trading in the Consolidated Shares to 10,000 Consolidated Shares, conditional upon the Share Consolidation becoming effective.

PROPOSED RIGHTS ISSUE

Conditional upon, among others, the Share Consolidation and the Increase in Authorised Share Capital becoming effective, the Company proposes to raise approximately HK$321.2 million, before expenses, by issuing 2,471,087,850 Rights Shares to the Qualifying Shareholders by way of a rights issue on the basis of five Rights Shares for every one Consolidated Share held on the Record Date at the Subscription Price of HK$0.13 per Rights Share. Under the Rights Issue, 2,471,087,850 Rights Shares will be allotted and issued, representing approximately 83.33% of the issued share capital of the Company as enlarged by the allotment and issue of the Rights Shares.

Subject to the fulfillment or waiver (as appropriate) of the conditions to the Rights Issue and Bonus Warrant Issue, successful applicants of the Rights Shares will receive one Bonus Warrant for every five Rights Shares taken up. On the basis of 2,471,087,850 Rights Shares to be issued under the Rights Issue, the total number of Bonus Warrants to be issued will be 494,217,570. Each of the Bonus Warrants will entitle the holder(s) thereof to subscribe for one Consolidated Share at the Exercise Price of HK$0.10 per Consolidated Share (subject to adjustments), at any time between the date of issue of the Bonus Warrants and the day immediately preceding the date which is 24 months after the date of issue.

Details of the intended use of proceeds are set out in the paragraph headed “Reasons for the Rights Issue and the Bonus Warrant Issue and intended use of proceeds” below.

The Rights Issue (other than the Rights Shares that will be provisionally allotted to Global Wealthy and Mr. Suen as Qualifying Shareholders and will be taken up by them pursuant to the Irrevocable Undertakings) will be fully underwritten by the Underwriters on the terms and subject to the conditions set out in the Underwriting Agreement.

If the Underwriters terminate the Underwriting Agreement (see the paragraph headed “Termination or Rescission of the Underwriting Agreement” below) or the conditions precedent to the Rights Issue and the Bonus Warrant Issue (see the paragraph headed “Conditions Precedent to the Rights Issue, the Bonus Warrant Issue and the Underwriting Agreement” below) are not fulfilled, the Rights Issue and the Bonus Warrant Issue will not proceed. The attention of the investors and Shareholders is drawn to the paragraph headed “Warning of the risks of dealing in the Shares and the nil-paid Rights Shares and/or taking up the Rights Shares” below. The Rights Issue and the Bonus Warrant Issue are conditional, inter alia, upon the fulfillment of the conditions set out in this announcement under the section headed “Conditions Precedent to the Rights Issue, the Bonus Warrant Issue and the Underwriting Agreement”. Accordingly, the Rights Issue and the Bonus Warrant Issue may or may not proceed. Any Shareholders or other persons contemplating selling or purchasing Shares and/or nil-paid Rights Shares up to the date when the conditions of the Rights Issue and the Bonus Warrant Issue have not been fulfilled or waived (as appropriate) will bear the risk that the Rights Issue and the Bonus Warrant Issue could not become unconditional and may not proceed. Shareholders and the public are reminded to exercise caution when dealing in the securities of the Company and if they are in any doubt about their position, they should consult his/her/its own professional advisers.

The last day of dealings in the Consolidated Shares on a cum-entitlement basis is expected to be Thursday, 2 February 2012. The Consolidated Shares are expected to be dealt in on an ex-entitlement basis from Friday, 3 February 2012. Dealings in the Rights Shares in nil-paid form are expected to take place from Monday, 20 February 2012 to Monday, 27 February 2012 (both days inclusive). To qualify for the Rights Issue and the Bonus Warrant Issue, any transfer of the Shares or Consolidated Shares (as the case may be) (together with the relevant certificate(s)) must be lodged for registration with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited, by 4:30 p.m. on Monday, 6 February 2012.

The last day for acceptance and payment of the Rights Shares is expected to be on Thursday, 1 March 2012. The Company will apply to the Listing Committee for the listing of, and permission to deal in, the Rights Shares (in both their nil-paid and fully-paid forms), the Bonus Warrants and the Bonus Warrant Shares.

IMPLICATION UNDER THE LISTING RULES

As at the date of this announcement, Global Wealthy is a Shareholder interested in 437,433,866 Shares, representing approximately 8.85% of the existing issued share capital of the Company. Mr. Suen, the sole ultimate beneficial owner of Global Wealthy, is directly interested in 10,000,000 Shares and is indirectly through Global Wealthy interested in 437,433,866 Shares, together being 447,433,866 Shares in aggregate, representing approximately 9.05% of the existing issued share capital of the Company. Global Wealthy is therefore a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions (including the commission payment) contemplated under the Underwriting Agreement (a party to which is Global Wealthy) constitute connected transactions under Chapter 14A of the Listing Rules. Any issue of the Rights Shares to Global Wealthy under the Underwriting Agreement is exempt from the reporting, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.31(3)(c) of the Listing Rules. As the commission payment to be received by Global Wealthy as one of the Underwriters on normal commercial terms pursuant to the Underwriting Agreement is approximately HK$1.95 million and the relevant percentage ratios (other than the profits ratio) as defined in the Listing Rules are less than 5%, the commission payment to Global Wealthy constitutes a connected transaction that is only subject to the reporting and announcement requirements but is exempt from independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Pursuant to the requirements of the Listing Rules, the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue, the Bonus Warrant Issue are conditional upon the approval by the Shareholders (where applicable, the Independent Shareholders) by way of poll at the SGM. Pursuant to Rule 7.19(6) of the Listing Rules, any controlling Shareholders and their associates or, where there are no controlling Shareholders, the Directors (excluding the Independent Non-executive Directors), the chief executive of the Company and their respective associates shall abstain from voting in favour of the resolutions relating to the Rights Issue and the Bonus Warrant Issue. As at the date of this announcement, the Company does not have any controlling Shareholders and, save for Mr. Suen, none of the Directors holds any Shares of the Company and shall be required to abstain from voting in favour of the resolutions relating to the Rights Issue and the Bonus Warrant Issue at the SGM. Mr. Suen and Global Wealthy together with their respective associates are interested in an aggregate of approximately 9.05% of the existing issued share capital of the Company and Mr. Suen also holds the outstanding Share Options that can subscribe for 16,000,000 Shares (subject to adjustments). Global Wealthy and Mr. Suen, having a material interest in the Rights Issue and the Bonus Warrant Issue, to the extent they hold Shares at the SGM, Mr. Suen and Global Wealthy together with their respective associates, will be required to abstain from voting at the SGM in favour of the resolutions approving the Rights Issue and the Bonus Warrant Issue.

GENERAL

The Independent Board Committee has been established to make recommendations to the Independent Shareholders in relation to the Rights Issue and the Bonus Warrant Issue. In this connection, the Company has appointed the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Rights Issue and the Bonus Warrant Issue are fair and reasonable.

A circular containing, among others, (i) further details of the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue; (ii) a letter from the Independent Board Committee to the Independent Shareholders in respect of the Rights Issue and the Bonus Warrant Issue; (iii) a letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Bonus Warrant Issue; and (iv) a notice of convening the SGM with respect to the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue will be despatched to the Shareholders on or before Friday, 13 January 2012.

Upon passing of the necessary resolution(s) by the Shareholders (where applicable, the Independent Shareholders) at the SGM approving the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue, and upon the Share Consolidation and the Increase in Authorised Share Capital becoming effective, the Company will, on or around Wednesday, 15 February 2012, send the Prospectus Documents to the Qualifying Shareholders and whereas the Prospectus to the Non-Qualifying Shareholders for information purpose only.

PROPOSED SHARE CONSOLIDATION

Effects of the Share Consolidation

The following table sets out the effect of the Share Consolidation on the share capital of the Company (i) immediately before the Share Consolidation, and assuming that no further Shares are issued or repurchased between the date of this announcement and the date of the SGM and (ii) immediately after the Share Consolidation:

	Immediately before the	Immediately after the
	Share Consolidation	Share Consolidation
Nominal value per share	HK$0.01 per Share	HK$0.10 per
		Consolidated Share
Authorised share capital	HK$100,000,000 divided	HK$100,000,000 divided
of the Company	into 10,000,000,000	into 1,000,000,000
	Shares of HK$0.01 each	Consolidated Shares of
		HK$0.10 each
Issued and paid-up share	HK$49,421,757.12 divided	HK$49,421,757.00
capital of the Company	into 4,942,175,712	divided into 494,217,570
	Shares of HK$0.01 each	Consolidated Shares of
		HK$0.10 each

Upon the Share Consolidation becoming effective, the Consolidated Shares will rank pari passu in all respects with each other in accordance with the Bye-Laws. Fractional Consolidated Shares will not be issued by the Company to the Shareholders. Any fractional entitlements of the Consolidated Shares will be aggregated and sold for the benefit of the Company, if a premium (net of expenses) can be obtained.

Other than the relevant expenses incurred, the implementation of the Share Consolidation will have no effect on the consolidated net asset value of the Group, nor will it alter the underlying assets, business, operations, management or financial position of the Company or the interests of the Shareholders as a whole. The Board believes that the Share Consolidation will not have any material adverse effect on the financial position of the Group and that on the date the Share Consolidation is to be effected, there are no reasonable grounds for believing that the Company is, or after the Share Consolidation would be, unable to pay its liabilities as they become due. The Share Consolidation will not involve any diminution of any liability in respect of any unpaid capital of the Company or the repayment to the Shareholders of any unpaid capital of the Company nor will it result in any change in the relative rights of the Shareholders.

Reasons for the Share Consolidation

Based on the closing price of HK$0.083 per Share as quoted on the Stock Exchange on the Last Trading Day, the value per board lot of 8,000 Shares and 10,000 Consolidated Shares are HK$664 and HK$8,300 respectively. After the Share Consolidation becoming effective, the transaction costs per dollar value of each Consolidated Share will be significantly lower.

The Share Consolidation will increase the nominal value of the shares of the Company. It is expected that the Share Consolidation would bring about corresponding upward adjustments in the trading price of the Consolidated Shares on the Stock Exchange and the Board believes that it may attract more investors and extend the shareholders base of the Company.

The Board therefore believes that the Share Consolidation is in the interests of the Company and the Shareholders as a whole.

Conditions of the Share Consolidation

The Share Consolidation (which will be effected in accordance with the Bye-Laws and the Companies Act) is conditional upon:

(a) the passing of the necessary resolution(s) by the Shareholders to approve the Share Consolidation at the SGM to be convened by the Company; and
(b) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in, the Consolidated Shares in issue arising from the Share Consolidation.

Assuming the above conditions are fulfilled, it is expected that the Share Consolidation will become effective on the same date after the passing of the relevant resolution(s) approving the Share Consolidation. Subject to the passing of the requisite resolution(s) at the SGM approving the Share Consolidation, the Share Consolidation will comply with the laws of Bermuda. The Share Consolidation is not conditional upon resolution(s) have been passed at the SGM approving the Increase in Authorised Share Capital, the Rights Issue and/or the Bonus Warrant Issue.

Listing and Dealings

Application will be made to the Listing Committee of the Stock Exchange for the granting of the listing of, and permission to deal in, the Consolidated Shares arising from the Share Consolidation and the Consolidated Shares which may fall to be issued upon exercise of the subscription rights attaching to the Share Options. Subject to the granting of the listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange, the Consolidated Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated Shares on the Stock Exchange

or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Free Exchange of Consolidated Share Certificates and Trading Arrangement

Subject to the Share Consolidation becoming effective, Shareholders may submit certificates for the existing Shares, to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited, of 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong for exchange from Thursday, 2 February 2012 to Monday, 12 March 2012 (both dates inclusive), at the expense of the Company for certificates of the Consolidated Shares. Thereafter, certificates for the existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may from time to time be allowed by the Stock Exchange) for each share certificate of the existing Shares cancelled or each new share certificate issued for the Consolidated Shares, whichever number of certificates cancelled/issued is higher. The existing certificates will be valid for trading and settlement up to 4:00 p.m. on Wednesday, 7 March 2012, being the latest time for trading in board lot of 800 Consolidated Shares in the form of existing certificates (or such other date which will be announced by the Company) and will continue to be good evidence of legal title after the Share Consolidation has become effective and may be exchanged for certificates of the Consolidated Shares at any time in accordance with the foregoing.

Arrangement for Matching Service for Odd Lots

In order to facilitate the trading of odd lots (if any) of the Consolidated Shares arising from the Share Consolidation, a designated broker will be appointed to match the purchase and sale of odd lots of the Consolidated Shares at the relevant market price per Consolidated Share for the period from 9:00 a.m. on Thursday, 16 February 2012 to 4:00 p.m. on Wednesday, 7 March 2012 (both dates inclusive). Holders of odd lots of the Consolidated Shares should note that successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed. Any Shareholder, who is in any doubt about the odd lot arrangement, is recommended to consult his/her/its own professional advisers. Details of the colour of the share certificates and of the matching service will be provided in the circular to be despatched to the Shareholders in relation to, inter alia, the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue.

INCREASE IN AUTHORISED SHARE CAPITAL

The Increase in Authorised Share Capital is subject to and conditional upon the Share Consolidation becoming effective and the passing of an ordinary resolution by the Shareholders at the SGM.

CHANGE IN BOARD LOT SIZE

The Company proposes to change the board lot size for trading in the Shares from 8,000 Shares to 10,000 Consolidated Shares per board lot immediately after the Share Consolidation becoming effective. The change in board lot size of the Shares is not conditional upon the Rights Issue and the Bonus Warrant Issue and is not subject to the Shareholders’ approval at the SGM.

PROPOSED RIGHTS ISSUE

The Company proposes to raise approximately HK$321.2 million (before expenses) by way of a rights issue on the basis of five Rights Shares for every one Consolidated Share held on the Record Date at the Subscription Price of HK$0.13 per Rights Share.

Issue Statistics

Basis of the Rights Issue:

Five (5) Rights Shares for every one (1) Consolidated Share held on the Record Date with Bonus Warrants on the basis of one (1) Bonus Warrant for every five (5) Rights Shares taken up

Number of Shares in issue as at 4,942,175,712 Shares the date of this announcement: Number of Consolidated Shares 494,217,570 Consolidated Shares (assuming after the Share Consolidation that no further Shares are issued or repurchased becoming effective: between the date of this announcement and the date of the SGM)

Number of Rights Shares: 2,471,087,850 Rights Shares (assuming there shall be no further issue of new Shares or repurchase of Shares on or before the Record Date)

The aggregate nominal value of the Rights Shares:

HK$247,108,785.00

Subscription Price: HK$0.13 per Rights Share Number of Bonus Warrants: 494,217,570 Bonus Warrants Underwriters: Global Wealthy and Chung Nam

As at the date of this announcement, the Company has 16,000,000 Share Options outstanding. Save as disclosed, no outstanding convertible securities, options or warrants in issue which confer any right to subscribe for, convert or exchange into Shares other than the Share Options.

Assuming there shall be no further issue of new Shares or repurchase of Shares on or before the Record Date, the 2,471,087,850 nil-paid Rights Shares proposed to be provisionally allotted represent:

(i) 500% of the number of Consolidated Shares immediately upon completion of the Share Consolidation (based on the Company’s existing issued share capital as at the date of this announcement); and
(ii) approximately 83.33% of the Company’s issued share capital as enlarged by the issue of the Rights Shares.

Qualifying Shareholders and Non-Qualifying Shareholders

The Rights Issue and the Bonus Warrant Issue are only available to the Qualifying Shareholders. To qualify for the Rights Issue and the Bonus Warrant Issue, a Shareholder must:

(1) be registered as a member of the Company at the close of business on the Record Date; and
(2) not be a Non-Qualifying Shareholder.

Closure of Register of Members

The register of members of the Company will be closed from Tuesday, 7 February 2012 to Monday, 13 February 2012 (both days inclusive) for ascertaining entitlements of the Shareholders under the Rights Issue and the Bonus Warrant Issue. In order to be registered as a member of the Company on the Record Date, holders of Shares or Consolidated Shares (as the case may be) must lodge all transfers of the Shares or Consolidated Shares (as the case may be) (together with the relevant share certificate(s)) with the Company’s branch share registrar and transfer office in Hong Kong by 4:30 p.m. (Hong Kong time) on Monday, 6 February 2012. The Company’s branch share registrar and transfer office in Hong Kong is:

Tricor Tengis Limited 26th Floor, Tesbury Centre, 28 Queen’s Road East Wanchai, Hong Kong

The Company will, on or before the Prospectus Posting Date, post the Prospectus Documents to the Qualifying Shareholders and the Prospectus stamped “For information only” to the Non-Qualifying Shareholders for information purpose.

Basis of the Provisional Allotment

The basis of the provisional allotment shall be five Rights Shares for every one Consolidated Share held on the Record Date, being 2,471,087,850 Rights Shares at the Subscription Price of HK$0.13 per Rights Share. Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by completing the PAL and lodging the same with a remittance for the Rights Shares being applied for.

Rights of the Overseas Shareholders

The Prospectus Documents are not intended to be registered under the applicable securities legislation of any jurisdiction other than Hong Kong.

The Company will ascertain whether there are any Overseas Shareholders at the Record Date. In compliance with the necessary requirements of the Listing Rules, the Company will make enquiries regarding the feasibility of extending the Rights Issue and the Bonus Warrant Issue to the Overseas Shareholders (if any). If, based on legal opinions, the Directors consider that it is necessary or expedient not to offer the Rights Shares and the Bonus Warrant Shares to the Overseas Shareholders on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, the Rights Issue and the Bonus Warrant Issue will not be available to such Overseas Shareholders. Further information in this connection will be set out in the Prospectus Documents containing, among other things, details of the Rights Issue and the Bonus Warrant Issue, to be despatched to the Qualifying Shareholders as soon as practicable. The Company will send copies of the Prospectus to the Non-Qualifying Shareholders for their information only, but will not send any PAL and EAF to them. The Non-Qualifying Shareholders will be entitled to attend and vote at the SGM.

Arrangements will be made for the Rights Shares which would otherwise have been provisionally allotted to the Non-Qualifying Shareholders to be sold in the market in their nil-paid form as soon as practicable after dealings in the Rights Shares in their nil-paid form commence and before dealings in the Rights Shares in their nilpaid form ends, if a premium (net of expenses) can be obtained. The proceeds of such sale, less expenses, of more than HK$100 will be paid pro rata to the NonQualifying Shareholders. The Company will retain individual amounts of HK$100 or less for the benefits of the Company. Any unsold entitlements of Non-Qualifying Shareholders, together with any Rights Shares provisionally allotted but not accepted by the Qualifying Shareholders or otherwise not subscribed for by transferees of nilpaid Rights Shares, will be made available for excess application on EAFs by Qualifying Shareholders.

Overseas Shareholders should note that they may or may not be entitled to the Rights Issue and the Bonus Warrant Issue, subject to the results of enquiries made by the Directors pursuant to Rule 13.36(2)(a) of the Listing Rules. Accordingly, Overseas Shareholders should exercise caution when dealing in the securities of the Company.

Application for Excess Rights Shares

The Qualifying Shareholders shall be entitled to apply for any unsold entitlements of the Non-Qualifying Shareholders and any Rights Shares provisionally allotted but not accepted or otherwise not subscribed for by the transferees of nil-paid Rights Shares. Application may be made by completing the EAFs for application for excess Rights Shares and lodging the same with a separate remittance for the excess Rights Shares being applied for. The Directors will allocate the excess Rights Shares at their discretion, but on a fair basis in accordance with the Listing Rules on the following principles:

(i) preference will be given to applications for less than a board lot of Rights Shares where they appear to the Directors that such applications are made to round up odd-lot holdings to whole-lot holdings and that such applications are not made with the intention to abuse this mechanism; and
(ii) subject to availability of excess Rights Shares after allocation under principle (i) above, the excess Rights Shares will be allocated based on a sliding scale with reference to the number of excess Rights Shares applied by them (i.e. applications for a smaller number of Rights Shares are allocated with a higher percentage of successful application but will receive lesser number of Rights Shares; whereas applications for a larger number of Rights Shares are allocated with a smaller percentage of successful application but will receive greater number of Rights Shares).

Any persons holding Shares or Consolidated Shares through a nominee company should note that the Company will regard the nominee company as a single Shareholder according to the register of members of the Company. Accordingly, such Shareholders should note that the aforesaid arrangement in relation to the allocation of excess Rights Shares will not be extended to beneficial owners individually. Beneficial owners who hold their Shares or Consolidated Shares through a nominee company are advised to consider whether they would like to arrange registration of their Shares or Consolidated Shares in their own names prior to the Record Date.

For the Shareholders whose Shares or Consolidated Shares are held by their nominee(s) and would like to have their names registered on the register of members of the Company, they must complete the relevant registration with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited, by 4:30 p.m. on Monday, 6 February 2012.

Subscription Price

The Subscription Price is HK$0.13 per Rights Share, which shall be payable in full by the Qualifying Shareholders upon acceptance of the provisional allotment of the Rights Shares or, where applicable, upon application for any of the excess Rights Shares, or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

The Subscription Price represents:

(i) a discount of approximately 84.3% to the adjusted closing price of HK$0.83 per Consolidated Share based on the closing price of HK$0.083 per Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation;
(ii) a discount of approximately 85.1% to the adjusted average closing price of approximately HK$0.87 per Consolidated Share, based on the average closing price of approximately HK$0.087 as quoted on the Stock Exchange for the 5 consecutive trading days up to and including the Last Trading Day and adjusted for the effect of the Share Consolidation; and
(iii) a discount of approximately 48% to the theoretical ex-rights price of approximately HK$0.25 per Consolidated Share after the Rights Issue based on the closing price of HK$0.083 per Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation.

The net price per Rights Share (after deduction of expenses, including the commission to be paid to the Underwriters) will be approximately HK$0.126.

Bonus Warrant Issue

Subject to the fulfillment or waiver (as appropriate) of the conditions to the Rights Issue and the Bonus Warrant Issue, Bonus Warrants will be issued to Shareholders and such other persons who have taken up the Rights Shares on the basis of one Bonus Warrant for every five Rights Shares taken up. On the basis of 2,471,087,850 Rights Shares to be issued under the Rights Issue, the total number of the Bonus Warrants to be issued will be 494,217,570. Each of the Bonus Warrants will entitle the holder(s) thereof to subscribe for one Consolidated Share at the Exercise Price of HK$0.10 per Consolidated Share (subject to adjustments), at any time between the date of issue of the Bonus Warrants and the day immediately preceding the date which is 24 months after the date of issue of the Bonus Warrants. Assuming there shall be no further issue of new Shares or repurchase of Shares on or before the Record Date, the Bonus Warrant Shares to be issued upon full exercise of the Bonus Warrants will represent approximately 14.29% of issued share capital of the Company as enlarged by the allotment and issue of the Rights Shares and the Bonus Warrant Shares.

The Exercise Price of each Bonus Warrant represents:

(i) a discount of approximately 88% to the adjusted closing price of HK$0.83 per Consolidated Share based on the closing price of HK$0.083 per Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation;
(i) a discount of approximately 88.5% to the adjusted average closing price of approximately HK$0.87 per Consolidated Share based on the average closing price of approximately HK$0.087 per Share as quoted on the Stock Exchange for the 5 consecutive trading days ending on the Last Trading Day and adjusted for the effect of the Share Consolidation; and
(iii) a discount of approximately 60% to the theoretical ex-rights price of approximately HK$0.25 per Consolidated Share after the Rights Issue based on the closing price of HK$0.083 per Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Share Consolidation.

Assuming all the Bonus Warrants are exercised, estimated gross proceeds (before expenses) and estimated net proceeds of approximately HK$49.4 million and HK$49.2 million respectively will be raised. The net price per Bonus Warrant Share is therefore approximately HK$0.099. As the Bonus Warrants and the Bonus Warrant Shares will only be issued after the Share Consolidation has become effective, the aggregate nominal value of all the Bonus Warrant Shares that may fall to be issued is approximately HK$49.4 million.

Basis of determining the Subscription Price and the Exercise Price

The Subscription Price and the Exercise Price were arrived at after arm’s length negotiation between the Company and the Underwriters with reference to the market price of the Shares and the prevailing market conditions. The Directors consider that the discount would encourage Shareholders to participate in the Rights Issue and accordingly maintain their shareholdings in the Company and participate in the future growth of the Group. In view of the prevailing market conditions of the capital market in Hong Kong and the benefits of the Rights Issue, the Directors (excluding the Independent Non-executive Directors whose opinion will be set forth in the circular to be despatched to the Shareholders in relation to, among others, the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue, after having been advised by the Independent Financial Adviser) consider that the terms of the Rights Issue and the Bonus Warrant Issue are fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

Fractions of the Rights Shares and the Bonus Warrants (if any)

The Company will not provisionally allot fractions of Rights Shares in nil-paid form or allot fractions of the Bonus Warrants. All fractions of nil-paid Rights Shares and the Bonus Warrants will be aggregated (rounded down to the nearest whole number) and allotted to a nominee appointed by the Company and all nil-paid Rights Shares and Bonus Warrants arising from such aggregation will be sold in the market, if a premium (net of expenses) can be achieved, and the Company will retain the proceeds from such sale(s) for its benefit. Any unsold nil-paid Rights Shares will be made available for excess application by the Qualifying Shareholders.

Certificates for the Rights Shares, the Bonus Warrants and Refund Cheques

Subject to the fulfillment or waiver (as appropriate) of the conditions of the Rights Issue and the Bonus Warrant Issue, certificates for the fully-paid Rights Shares and certificates for the Bonus Warrants are expected to be posted on or before Friday, 9 March 2012 to those Qualifying Shareholders and applicants who have accepted or (as the case may be) applied and paid for the Rights Shares, at their own risks.

Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares (if any) are expected to be posted on or before Friday, 9 March 2012 by ordinary post to the applicants at their own risks.

Status of the Rights Shares and the Bonus Warrant Shares

The Rights Shares and the Bonus Warrant Shares, when fully paid and issued, will rank pari passu in all respects with the Consolidated Shares then in issue, including the right to receive all future dividends and distributions which may be declared, made or paid on or after the date of allotment of the Rights Shares in their fully-paid form or the Bonus Warrant Shares (as the case may be).

Specific Mandate to Allot and Issue the Bonus Warrant Shares

The Company will allot and issue the Bonus Warrant Shares upon exercise of the rights attaching to the Bonus Warrants. The Board proposed to seek the grant of a specific mandate from the Shareholders to allot and issue the Bonus Warrant Shares at the SGM.

Application for Listing

The Company will apply to the Listing Committee for the listing of, and permission to deal in, the Rights Shares (in both nil-paid and fully-paid forms), the Bonus Warrants and the Bonus Warrant Shares.

No part of the securities of the Company is listed or dealt in or on which listing or permission to deal is being or is proposed to be sought on any other stock exchange.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares (in both their nil-paid and fully-paid forms), the Bonus Warrants and the Bonus Warrant Shares on the Stock Exchange, the Rights Shares (in both their nil-paid and fully-paid forms), the Bonus Warrants and the Bonus Warrant Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from their respective commencement dates of dealings in the Rights Shares in each of their nil-paid and fully-paid forms, the Bonus Warrants and the Bonus Warrant Shares on the Stock Exchange or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Nil-paid Rights Shares and Bonus Warrants are both expected to be traded in board lots of 10,000. Dealings in the Rights Shares (in both nil-paid and fully-paid forms), the Bonus Warrants and the Bonus Warrant Shares will be subject to the payment of stamp duty, Stock Exchange trading fee, Securities and Futures Commission transaction levy or any other applicable fees and charges in Hong Kong.

Irrevocable Undertakings

As at the date of this announcement, Global Wealthy is a Shareholder interested in 437,433,866 Shares, representing approximately 8.85% of the existing issued share capital of the Company. Global Wealthy is a wholly owned subsidiary of Excelsior Kingdom, which in turn is wholly and beneficially owned by Mr. Suen. Mr. Suen is directly interested in 10,000,000 Shares and is indirectly through Global Wealthy interested in 437,433,866 Shares, together being 447,433,866 Shares in aggregate, representing approximately 9.05% of the existing issued share capital of the Company and Mr. Suen holds the Share Options entitling him to subscribe for 16,000,000 Shares.

Global Wealthy as a Shareholder, Excelsior Kingdom as sole owner of Global Wealthy and Mr. Suen as the ultimate beneficial owner of Global Wealthy, a Shareholder and a holder of the Share Options, have given the Irrevocable Undertakings to the Company and Chung Nam that:

(i) Global Wealthy will, Excelsior Kingdom will procure, and Mr. Suen will and will procure that the applications in respect of 218,716,930 Rights Shares by Global Wealthy and 5,000,000 Rights Shares by Mr. Suen comprising their respective entitlements under the Rights Issue will be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited, with payment in full therefor in cash, by no later than the Latest Time for Acceptance and otherwise in accordance with the instructions printed on the PAL(s);
(ii) the Consolidated Shares comprising Mr. Suen’s and Global Wealthy’s current shareholding beneficially owned by him/it shall remain beneficially owned by him/it from the date of their undertakings up to and including the date on which dealings in the fully-paid Rights Shares are expected to commence on the Stock Exchange (or such later date as may be agreed with the Company in writing); and
(iii) Global Wealthy will not, and Mr. Suen will not, and he and Excelsior Kingdom will procure Global Wealthy not to apply for any additional Rights Shares, by way of excess application.

Mr. Suen further undertakes to the Company and Chung Nam that he will not exercise the subscription rights attaching to the Share Options on or before the Latest Time for Termination.

CONDITIONS PRECEDENT TO THE RIGHTS ISSUE, THE BONUS WARRANT ISSUE AND THE UNDERWRITING AGREEMENT

The Rights Issue, the Bonus Warrant Issue and the underwriting obligations of the Underwriters under the Underwriting Agreement are conditional upon the following:

(i) the Share Consolidation and the Increase in Authorised Share Capital having become effective;
(ii) the passing of the necessary resolution(s) by the Shareholders (where applicable, the Independent Shareholders) at the SGM to approve, among others, the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue, and the transactions contemplated thereunder;
(iii) the delivery to the Stock Exchange for authorisation and the registration with the Registrar of Companies in Hong Kong respectively of one copy of each of the Prospectus Documents duly signed by two Directors (or by their agents duly authorised in writing) as having been approved by resolution of the Directors (and

all other documents required to be attached thereto) and otherwise in compliance with the Listing Rules and the Companies Ordinance not later than the Prospectus Posting Date;

(iv) the filing of one copy of the Prospectus Documents with the Registrar of Companies in Bermuda prior to or as soon as reasonably practicable after publication of the Prospectus Documents in compliance with the Companies Act;
(v) the posting of the Prospectus Documents to the Qualifying Shareholders and the posting of the Prospectus stamped “For information only” to the Non-Qualifying Shareholders, if any, for their information purpose on or before the Prospectus Posting Date;
(vi) the Listing Committee granting or agreeing to grant (subject to allotment) the listing of, and permission to deal in, the Rights Shares (in both their nil-paid and fully-paid forms), the Bonus Warrants and the Bonus Warrants Shares, either unconditionally or subject to such conditions as the Underwriters may in their absolute discretion accept and the satisfaction of such conditions (if any and where relevant) before 8:00 a.m. on the first date of dealings in nil-paid Rights Shares, the Bonus Warrants and the Bonus Warrant Shares on the Stock Exchange and not having withdrawn or revoked such listing and permission on the first day of their dealings;
(vii) if necessary, the obtaining of the consent or permission from the Bermuda Monetary Authority in respect of the issue of the Rights Shares and the Bonus Warrant Issue on or before the Prospectus Posting Date;
(viii) compliance with and performance by the Company of all the undertakings and obligations under the terms of the Underwriting Agreement;
(ix) compliance with and performance of all undertakings and obligations of Mr. Suen and Global Wealthy under the Irrevocable Undertakings;
(x) compliance with and performance of all undertakings and obligations of the Underwriters pursuant to the terms and conditions of the Underwriting Agreement; and
(xi) the obligations of the Underwriters under the Underwriting Agreement not being terminated by the Underwriters in accordance with the terms thereof.

Where any condition relates to compliance with applicable laws, rule and regulations, it cannot be waived. Subject to the foregoing sentence, the above conditions (i) to (vii) cannot be waived, the Company may waive the condition (x), and the Underwriters may waive the condition (viii).

In the event that the above conditions have not been satisfied or waived on or before

4:00 p.m. on Tuesday, 6 March 2012 (or such other date as the Underwriters and the Company may agree in writing), the obligations of the parties to the Underwriting Agreement shall cease and determine and no party shall have any claim against the other party save for any antecedent breach of the Underwriting Agreement and save that all legal fees as well as such other out of pocket expenses of the Underwriters shall continue to be borne by the Company, and the Rights Issue and the Bonus Warrant Issue will not proceed.

UNDERWRITING ARRANGEMENT

The Underwriting Agreement

Date: 20 December 2011 Underwriters: (1) Global Wealthy, a Shareholder of the Company as at the date of this announcement; and
(2) Chung Nam, to the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, Chung Nam and its ultimate beneficial owners are independent third parties. As at the date of this announcement, Chung Nam and its associates are not interested in any Shares or securities of the Company
Number of Rights Shares The Underwriters have conditionally agreed underwritten: pursuant to the Underwriting Agreement and subject to the Irrevocable Undertakings to underwrite the Underwritten Shares, being 2,247,370,920 Rights Shares, on a fully underwritten basis in the following priority: (1) Firstly, Global Wealthy shall underwrite up to a maximum of 601,000,000 Underwritten Shares; and
(2) Secondly, Chung Nam shall underwrite the balance of the Underwritten Shares up to a maximum of 1,646,370,920 Right Shares.

Total number of Bonus Warrants: 494,217,570 Bonus Warrants Commission: 2.50% of the aggregate Subscription Price in respect of the number of Underwritten Shares to be underwritten by the Underwriters

The commission rate was determined after arm’s length negotiation between the Company and the Underwriters by reference to the existing financial position of the Group, the size of the Rights Issue, and the current and expected market condition. The Directors (excluding the Independent Non-executive Directors who will give their view on the Rights Issue and the Bonus Warrant Issue after taking into account the advice of the Independent Financial Adviser) consider the terms of the Underwriting Agreement including the commission rate are fair and reasonable so far as the Company and the Shareholders are concerned. Mr. Suen has abstained from voting at the meeting of the Board approving the Rights Issue and the Bonus Warrant Issue and all matters contemplated thereunder.

Pursuant to the Underwriting Agreement, Chung Nam undertakes and warrants to the Company that:

(i) it shall use all reasonable endeavours to procure that each of the subscribers of the Underwritten Shares (including any direct and indirect sub-underwriters) shall be third party independent of, not acting in concert with and not connected with the Directors, chief executive or substantial shareholders of the Company (within the meaning of the Listing Rules) or any of its subsidiaries and their respective associates;
(ii) in performing its undertaking obligations under the Underwriting Agreement, no subscriber or sub-underwriter (including any direct and indirect sub-underwriters) of the Underwritten Shares will, together with any party acting in concert with it or its associates (within the meaning of the Takeovers Code), become a Shareholder holding 10% or more of the voting rights of the Company immediately upon completion of the Rights Issue;
(iii) it shall, and it shall use all reasonable endeavours to ensure that no subscriber or sub-underwriter (including any direct and indirect sub-underwriters) of the Underwritten Shares will, together with any party acting in concert with it or its associates (within the meaning of the Takeovers Code), become a Shareholder holding 30% or more of the voting rights of the Company immediately upon completion of the Rights Issue; and
(iv) it shall use all reasonable endeavours to ensure that each of the subscribers or sub-underwriters of the Underwritten Shares procured by it shall be third parties independent of and not parties acting in concert with Global Wealthy, Excelsior Kingdom, their respective directors and shareholders or their associates and are not a connected person of the Company such that the Company will be able to comply with the minimum public float requirement set out in Rule 8.08(1) of the Listing Rules.

In the event that no Shareholders (except Mr. Suen and Global Wealthy) take up their entitlements of the Rights Shares, it is expected that Mr. Suen and Global Wealthy will hold up to 869,460,316 Consolidated Shares representing approximately 29.32% of the enlarged issued share capital of the Company upon completion of the Rights Issue. Save that, it is expected that (i) no subscriber or purchaser of the Underwritten Shares will become a substantial shareholder (as defined in the Listing Rules) immediately after completion of the Rights Issue; (ii) Chung Nam and its associates, together with any party acting in concert (within the meaning of the Takeovers Code) with it will not become a Shareholder holding 20% or more of the voting rights of the Company immediately after completion of the Rights Issue.

Save as disclosed above, the Board has not received any information or irrevocable undertakings, other than the Irrevocable Undertakings from Global Wealthy and Mr. Suen, from any Shareholders of their intention to take up their assured entitlements under the Rights Issue.

Termination or Rescission of the Underwriting Agreement

If, prior to the Latest Time for Termination:

(1) in the reasonable opinion of Chung Nam (after prior consultation with Global Wealthy), the success of the Rights Issue and the Bonus Warrant Issue would be materially and adversely affected by:
(a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the reasonable opinion of Chung Nam (after prior consultation with Global Wealthy), materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Rights Issue and the Bonus Warrant Issue; or
(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date thereof) of a political, military, financial, economic or other nature (whether or not ejusdem generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the reasonable opinion of Chung Nam (after prior consultation with Global Wealthy), materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or materially and adversely prejudice the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue and the Bonus Warrant Issue; or
(c) any material adverse change in the business or in the financial or trading position of the Group as a whole; or

(2) any material adverse change in market conditions (including without limitation, any change in fiscal or monetary policy, or foreign exchange or currency markets, suspension or material restriction or trading in securities) occurs which in the reasonable opinion of Chung Nam (after prior consultation with Global Wealthy) are likely to materially or adversely affect the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue and the Bonus Warrant Issue; or
(3) there is any change in the circumstances of the Company or any member of the Group which in the reasonable opinion of Chung Nam (after prior consultation with Global Wealthy) will adversely affect the prospects of the Company, including without limiting the generality of the foregoing the presentation of a petition or the passing of a resolution for the liquidation or winding up or similar event occurring in respect of any of member of the Group or the destruction of any material asset of the Group; or
(4) any suspension in the trading of securities generally or the Company’s securities on the Stock Exchange for a period of more than ten consecutive Business Days, excluding any suspension in connection with the clearance of this announcement, or the Prospectus Documents or other announcements or circulars in connection with the Rights Issue and the Bonus Warrant Issue; or
(5) the circular, prospectus or announcements of the Company (including any amendments or supplements thereto) published since the date of the Underwriting Agreement when published contain information (either as to business prospects or the condition of the Group or as to its compliance with any laws, Listing Rules, Takeovers Code or any applicable regulations) which has not prior to the date of the Underwriting Agreement been publicly announced or published by the Company and which in the reasonable opinion of Chung Nam (after prior consultation with Global Wealthy) are material to the Group as a whole and is likely to affect materially and adversely the success of the Rights Issue or might cause a prudent investor not to accept the Rights Issue provisionally allotted to it,

then, Chung Nam shall (after prior consultation with Global Wealthy) at its reasonable discretion be entitled by notice in writing to the Company (which shall be binding on Global Wealthy), served prior to the Latest Time for Termination, to terminate the Underwriting Agreement.

Chung Nam (after prior consultation with Global Wealthy) shall be entitled by notice in writing to the Company to rescind the Underwriting Agreement if prior to the Latest Time for Termination:

(1) any material breach of any of the representations, warranties or undertakings of the Company contained in the Underwriting Agreement that comes to the knowledge of Chung Nam; or
(2) any Specified Event comes to the knowledge of Chung Nam,

provided that Chung Nam shall have given prior notice of its intention to rescind to Global Wealthy. Any such notice of recission shall be served by Chung Nam to the Company (which shall be binding on Global Wealthy) prior to the Latest Time for Termination.

Upon termination or rescission of the Underwriting Agreement, the Rights Issue and the Bonus Warrant Issue will not proceed, and the obligations of all parties under the Underwriting Agreement shall terminate and no party shall have any claim against any other party save for any antecedent breaches.

REASONS FOR THE RIGHTS ISSUE AND THE BONUS WARRANT ISSUE AND INTENDED USE OF PROCEEDS

The Group is principally engaged in the business of supply and procurement of metal minerals, pharmaceutical products, provision of finance and securities investment.

The estimated gross proceeds (before expenses) and the estimated net proceeds from the Rights Issue (after deduction of expenses, including the commission to be paid to the Underwriters) will be approximately HK$321.2 million and HK$311.7 million respectively. The Company intends to apply the net proceeds from the Rights Issue for the following purposes:

(i) not less than 50% of the net proceeds on potential and future investments in energy and resources related business or other suitable/attractive business opportunities by way of trading or acquisitions of business or assets, in particular, the Company is conducting feasibility studies on the business of methanol and may pursue business opportunities in that area; and
(ii) the remaining balance of the net proceeds will be applied for general corporate and working capital of the Group.

Methanol is an important raw material for the chemical industry and has wide industrial applications including production of synthetic fibre, plastic, pharmaceutical, pesticides, dye and synthetic protein and can also be used to produce fuel which is commonly considered as an alternative energy source. The business of trading of methanol requires pledging of cash with bank(s) for the purpose of issuing letter(s) of credit. Given the value of each trading contract, substantial amounts have to be reserved for this purpose. The Company expects to commit not less than HK$150 million for the methanol business when it is materialized.

Assuming all the Bonus Warrants are exercised, estimated gross proceeds (before expenses) and estimated net proceeds of approximately HK$49.4 million and HK$49.2 million respectively will be raised. The Company intends to apply such net proceeds as general corporate and working capital of the Group for its future business development.

The Board considers that it is prudent to finance the Group’s long-term growth by long-term financing, preferably in the form of equity after considered other fund raising alternatives for the Group, such as bank borrowings and issuance of convertible securities, after taking into account the benefits and cost of each alternatives. The Rights Issue allows the Group to strengthen its financial position without raising debts and bearing interests. Taken into account the terms of the Rights Issue, the Board considers that the Rights Issue are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Furthermore, it also offers all the Qualifying Shareholders an equal opportunity to participate in the enlargement of the capital base of the Company and enables the Qualifying Shareholders to maintain their proportionate interests in the Company to participate in the future development of the Company should they wish to do so. However, those Qualifying Shareholders who do not take up the Rights Shares to which they are entitled should note that their shareholdings in the Company will be diluted.

As at 30 September 2011, the Group had cash and bank balances of approximately HK$444,695,000 and net proceeds of approximately HK$74,400,000 had been raised in the placing of Shares completed on 1 November 2011. According to the Group’s operational plan, most of the cash resources have been designated to finance the existing operations of the Group where (i) approximately HK$250 million have been designated to be pledged with bank(s) from time to time for trade facilities granted by banks to finance the operation of the Group’s supply and procurement division; (ii) approximately HK$165 million have been designated for settlement of the balance of purchase price for the acquisition of an intellectual property rights to a Chinese medicine known as Jinhua Qinggan and as additional working capital for the Group’s pharmaceutical division; and (iii) the remaining cash resources of approximately HK$104 million have been designated to finance the Group’s other operating activities. Having considered the cash position of the Group and the intended usages of the available cash resources, the Board considers that the current capital raising activities is appropriate and beneficial for the long term development of the Group.

POSSIBLE ADJUSTMENT TO THE SHARE OPTIONS

As at the date of this announcement, there are 16,000,000 Share Options outstanding entitling Mr. Suen to subscribe for 16,000,000 Shares. As a result of the proposed Share Consolidation, Rights Issue and Bonus Warrant Issue, adjustments will need to be made to the exercise price and/or the number of Shares or Consolidated Shares (as the case may be) to be issued upon exercise of the Share Options in accordance with the terms and conditions of the Share Options. The Company will notify Mr. Suen regarding adjustments to be made as and when appropriate.

FUND RAISING EXERCISES OF THE COMPANY DURING THE PAST 12 MONTHS

The Company’s equity fund raising exercises over the past 12-month period immediately preceding the date of this announcement are set out below:

Date of	Fund raising	Net proceeds raised	Use of	Actual use of
announcement	activity	(approximately)	net proceeds	net proceeds
24 October 2011	Placing of 823,695,952	HK$74.4 million	General working	Used as intended
	new Shares at a price		capital
	of HK$0.093 per Share
	under general mandate,
	completed on 1 November
	2011
10 November 2010	Placing of 1,000,000,000	HK$311.2 million	For (i) general working	Used as intended
	new Shares at a price		capital; (ii) repayment	(approximately
	of HK$0.32 per Share		of debts of the Group	HK$124 million used
	under specific mandate,		and/or (iii) funding of	as general working
	completed on 8 February		appropriate investment	capital of the Group
	2011		opportunities if arise	and approximately
				HK$187.2 million
				used to repurchase
				convertible notes issued
				by the Company)

Save for the above, the Company has not carried out other capital raising activities in the 12 months immediately preceding the date of this announcement.

EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholding structure of the Company assuming that there is no change in the shareholding structure of the Company from the date of this announcement until such date falling immediately after completion of the Share Consolidation, the Rights Issue and the Bonus Warrant Issue, and assuming there shall be no further issue of new Shares or repurchase of Shares on or before the Record Date.

Shareholders Substantial Shareholders Global Wealthy_(Note 1) Global Wealthy as Underwriter Director Mr. Suen Public Chung Nam and/or subscribers procured by it(Note 2)_ Other public Shareholders Total	As at the date of this announcement Number of Approx. Shares % 437,433,866 8.85% N/A N/A 10,000,000 0.20% N/A N/A 4,494,741,846 90.95% 4,942,175,712 100.00%	Before full exercise of Bonus Warrants After full exercise of Bonus Warrants None of the Rights None of the Rights Shares Shares are subscribed are subscribed by the by the Qualifying Immediately after the Share Qualifying Shareholders Shareholders (except Consolidation but before (except Mr. Suen and Mr. Suen and the completion of All Rights Shares are Global Wealthy) All Rights Shares are Global Wealthy) Rights Issue and subscribed by the and all taken up subscribed by the and all taken up Bonus Warrant Issue Qaulifying Shareholders by the Underwriters Qualifying Shareholders by the Underwriters Number of Number of Number of Number of Number of Consolidated Approx. Consolidated Approx. Consolidated Approx. Consolidated Approx. Consolidated Approx. Shares % Shares % Shares % Shares % Shares % 43,743,386 8.85% 262,460,316 8.85% 262,460,316 8.85% 306,203,702 8.85% 306,203,702 8.85% N/A N/A N/A N/A 601,000,000 20.27% N/A N/A 721,200,000 20.85% 1,000,000 0.20% 6,000,000 0.20% 6,000,000 0.20% 7,000,000 0.20% 7,000,000 0.20% N/A N/A N/A N/A 1,646,370,920 55.52% N/A N/A 1,975,645,104 57.11% 449,474,184 90.95% 2,696,845,104 90.95% 449,474,184 15.16% 3,146,319,288 90.95% 449,474,184 12.99% 494,217,570 100.00% 2,965,305,420 100.00% 2,965,305,420 100.00% 3,459,522,990 100.00% 3,459,522,990 100.00%	Before full exercise of Bonus Warrants After full exercise of Bonus Warrants None of the Rights None of the Rights Shares Shares are subscribed are subscribed by the by the Qualifying Immediately after the Share Qualifying Shareholders Shareholders (except Consolidation but before (except Mr. Suen and Mr. Suen and the completion of All Rights Shares are Global Wealthy) All Rights Shares are Global Wealthy) Rights Issue and subscribed by the and all taken up subscribed by the and all taken up Bonus Warrant Issue Qaulifying Shareholders by the Underwriters Qualifying Shareholders by the Underwriters Number of Number of Number of Number of Number of Consolidated Approx. Consolidated Approx. Consolidated Approx. Consolidated Approx. Consolidated Approx. Shares % Shares % Shares % Shares % Shares % 43,743,386 8.85% 262,460,316 8.85% 262,460,316 8.85% 306,203,702 8.85% 306,203,702 8.85% N/A N/A N/A N/A 601,000,000 20.27% N/A N/A 721,200,000 20.85% 1,000,000 0.20% 6,000,000 0.20% 6,000,000 0.20% 7,000,000 0.20% 7,000,000 0.20% N/A N/A N/A N/A 1,646,370,920 55.52% N/A N/A 1,975,645,104 57.11% 449,474,184 90.95% 2,696,845,104 90.95% 449,474,184 15.16% 3,146,319,288 90.95% 449,474,184 12.99% 494,217,570 100.00% 2,965,305,420 100.00% 2,965,305,420 100.00% 3,459,522,990 100.00% 3,459,522,990 100.00%
			100.00%

Notes:

Global Wealthy, a company incorporated in the British Virgin Islands with limited liability, is a wholly owned subsidiary of Excelsior Kingdom, which in turn is wholly owned by Mr. Suen, an Executive Director and the Chairman of the Company.
Chung Nam undertakes and warrants to the Company that in performing its obligations under the Underwriting Agreement, no subscriber or sub-underwriter (including any direct or indirect subunderwriters) of the Underwritten Shares will, together with any party acting in concert with it or its associates, become a Shareholder holding 10% or more of the voting rights of the Company immediately after completion of the Rights Issue.

As at the date of this announcement, the outstanding Share Options that can subscribe for 16,000,000 Shares under the share option scheme of the Company held by Mr. Suen remain unexercised and Mr. Suen undertakes to the Company not to exercise the Share Options on or before the Latest Time for Termination.
For illustration purposes only, in the event that, upon completion of the Rights Issue, no Qualifying Shareholders (except Global Wealthy and Mr. Suen) take up any Rights Shares, the Underwriters will be required to subscribe for or procure subscribers of the Underwritten Shares, which will result in Global Wealthy taking up 601,000,000 Rights Shares such that the total shareholding of Global Wealthy, together with parties acting in concert with it (including Mr. Suen), will increase to an aggregate of 869,460,316 Consolidated Shares, representing approximately 29.32% of the entire issued share capital of the Company as enlarged by the Rights Issue immediately after completion of the Rights Issue, and assuming all of the Bonus Warrants have been exercised, an aggregate of 1,034,403,702 Consolidated Shares, representing approximately 29.90% of the entire issued share capital of the Company as enlarged by the Rights Issue and full exercise of the Bonus Warrants.

Shareholders and public investors should note that the above changes in shareholding structure of the Company are for illustration purpose only and the actual change in the shareholding structure of the Company upon completion of the Rights Issue and the full exercise of the Bonus Warrants are subject to various factors including, among other things, the results of acceptance of the Rights Issue and the exercising of the Bonus Warrants.

EXPECTED TIMETABLE FOR THE SHARE CONSOLIDATION, CHANGE IN BOARD LOT SIZE, RIGHTS ISSUE AND BONUS WARRANT ISSUE

2012

Despatch of circular with notice and proxy form of SGM. . . . . . . . . . Friday, 13 January

Latest time for lodging proxy forms for the SGM . . . . . . . . . . . . . 9:00 a.m. on Monday, 30 January Expected date of SGM . . . . . . . . . . . . . . . . . . . . . .9:00 a.m. on Wednesday, 1 February Announcement of the results of SGM . . . . . . . . . . . . . . . . . . . . . Wednesday, 1 February

Effective date of the Share Consolidation . . . . . . . .5:00 p.m. on Wednesday, 1 February

Dealing in the Consolidated Shares commences . . . . 9:00 a.m. on Thursday, 2 February

Original counter for trading in Shares in. . . . . . . . . . 9:00 a.m. on Thursday, 2 February existing share certificates in board lots 8,000 Shares temporarily closes

2012

Temporary counter for trading in . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 2 February Consolidated Shares in board lots of 800 Consolidated Shares (in the form of existing share certificates) opens

First day of free exchange of existing . . . . . . . . . . . . . . . . . . . . . . .Thursday, 2 February certificates for the Shares into new certificates for the Consolidated Shares

Last day of dealings in Consolidated Shares . . . . . . . . . . . . . . . . . .Thursday, 2 February on a cum-entitlement basis to the nil-paid Rights Shares and the Bonus Warrants

First day of dealings in Consolidated Shares on . . . . . . . . . . . . . . . . . Friday, 3 February an ex-entitlement basis to the nil-paid Rights Shares and the Bonus Warrants Latest time for lodging transfer of Shares in . . . . . . . . . . . . . . . . 4:30 p.m. on Monday, order to be qualified for the Rights Issue and 6 February the Bonus Warrant Issue Closure of register of members of . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 7 February to the Company (both dates inclusive) Monday, 13 February Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Monday, 13 February Register of members of the Company re-opens . . . . . . . . . . . . . . . Tuesday, 14 February Despatch of Prospectus Documents. . . . . . . . . . . . . . . . . . . . . . Wednesday, 15 February Designated broker starts to stand in the . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, market to provide for matching services for 16 February the sale and purchase of odd lots of Consolidated Shares Parallel trading in the Consolidated Shares . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, (represented both existing and 16 February new certificates) commences Original counter for trading in Consolidated. . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, Shares in board lots of 10,000 Consolidated 16 February Shares (only new certificates for the Consolidated Shares can be traded at this counter) re-opens

2012

First day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . .Monday, 20 February Latest for splitting in nil-paid Rights Shares. . . . .4:30 p.m. on Wednesday, 22 February Last day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . .Monday, 27 February Latest time for acceptance of, and payment for, . . . . . . 4:00 p.m. on Thursday, 1 March the Rights Shares and the application for excess Rights Shares Latest time to terminate the Underwriting. . . . . . . . . . . . 4:00 p.m. on Tuesday, 6 March Agreement and for the Rights Issue to become unconditional Temporary counter for trading in . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 7 March Consolidated Shares in board lots of 800 Consolidated Shares (in the form of existing share certificates) closes Designated brokers ceases to stand in . . . . . . . . . . . . 4:00 p.m. on Wednesday, 7 March the market to provide matching service Parallel trading in the Consolidated Shares . . . . . . . . 4:00 p.m. on Wednesday, 7 March (represented both existing and new certificates) ends Announcement of results of the Rights Issue . . . . . . . . . . . . . . . . . . .Thursday, 8 March Refund cheques to be despatched in relation to. . . . . . . . . . . . . . . . . . . .Friday, 9 March wholly or partially unsuccessful applications for excess Rights Shares on or before Certificates for fully paid Rights Shares and. . . . . . . . . . . . . . . . . . . . . .Friday, 9 March Bonus Warrants to be despatched on or before Last day of free exchange of existing . . . . . . . . . . . . . . . . . . . . . . . . Monday, 12 March certificates for the Shares into new certificates for the Consolidated Shares Commencement of dealings in fully-paid . . . . . . . . . . . 9:00 a.m. on Tuesday, 13 March Rights Shares and the Bonus Warrants

Note:

All times stated in this announcement refer to Hong Kong times. Dates stated in this announcement for events in the timetable are indicative only and may be extended or varied. Any changes to the expected timetable for the Rights Issue will be announced as appropriate.

IMPLICATION UNDER THE LISTING RULES

As at the date of this announcement, Global Wealthy is a Shareholder interested in 437,433,866 Shares, representing approximately 8.85% of the existing issued share capital of the Company. Mr. Suen, an Executive Director and the sole ultimate beneficial owner of Global Wealthy, is directly interested in 10,000,000 Shares and is indirectly through Global Wealthy interested in 437,433,866 Shares, together being 447,433,866 Shares in aggregate, representing approximately 9.05% of the existing issued share capital of the Company. Global Wealthy is therefore a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions (including the commission payment) contemplated under the Underwriting Agreement constitute connected transactions under Chapter 14A of the Listing Rules. Any issue of the Rights Shares to Global Wealthy under the Underwriting Agreement is exempt from the reporting, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.31(3)(c) of the Listing Rules. As the commission payment to be received by Global Wealthy as one of the Underwriters on normal commercial terms pursuant to the Underwriting Agreement is approximately HK$1.95 million and the relevant percentage ratios (other than the profits ratio) as defined in the Listing Rules are less than 5%, the commission payment to Global Wealthy constitutes a connected transaction that is only subject to the reporting and announcement requirements but is exempt from independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Pursuant to the requirements of the Listing Rules, the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue are conditional upon the approval by the Shareholders by way of poll at the SGM. Pursuant to Rule 7.19(6) of the Listing Rules, any controlling Shareholders and their associates or, where there are no controlling Shareholders, the Directors (excluding the Independent Non-executive Directors), the chief executive of the Company and their respective associates shall abstain from voting in favour of the resolutions relating to the Rights Issue and the Bonus Warrant Issue. As at the date of this announcement, the Company does not have any controlling Shareholders and, save for Mr. Suen, none of the Directors holds any Shares of the Company and shall be required to abstain from voting in favour of the resolutions relating to the Rights Issue and the Bonus Warrant Issue at the SGM. Mr. Suen and Global Wealthy together with their respective associates are interested in an aggregate of approximately 9.05% of the existing issued share capital of the Company and Mr. Suen also holds the outstanding Share Options that can subscribe for 16,000,000 Shares (subject to adjustments). Global Wealthy and Mr. Suen, having a material interest in the Rights Issue and the Bonus Warrant Issue, to the extent they hold Shares at the SGM, Mr. Suen and Global Wealthy together with their respective associates will be required to abstain from voting at the SGM in favour of the resolutions approving the Rights Issue and the Bonus Warrant Issue.

WARNING OF THE RISKS OF DEALING IN THE SHARES AND THE NIL-PAID RIGHTS SHARES AND/OR TAKING UP THE RIGHTS SHARES

The last day of dealing in the Shares on a cum-rights basis is Thursday, 2 February 2012. The Shares will be dealt in on an ex-rights basis commencing from Friday, 3 February 2012. Dealings in the Rights Shares in the nil-paid form are expected to take place from Monday, 20 February 2012 to Monday, 27 February 2012 (both dates inclusive). Shareholders and potential investors should note that dealing in the Shares and/or nil-paid Rights Shares will take place while the conditions to which the Underwriting Agreement is subject remain unfulfilled. If the conditions of the Underwriting Agreement are not fulfilled or the Underwriting Agreement is terminated by the Underwriters, the Rights Issue and the Bonus Warrant Issue will not proceed.

Any dealings in the Shares from the date of this announcement and up to 4:00 p.m. on Tuesday, 6 March 2012, being the time and date by which all the conditions of the Rights Issue and the Bonus Warrant Issue are to be fulfilled and when the right of the Underwriters to terminate the Underwriting Agreement is to lapse, and any dealings in the Rights Shares in their nil-paid form between Monday, 20 February 2012 to Monday, 27 February 2012, both days inclusive, are accordingly subject to the risk that the Rights Issue and the Bonus Warrant Issue may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the Shares or the Rights Shares in their nil-paid form and, if they are in any doubt about their position, they should consult their professional adviser(s).

GENERAL

Upon passing of the necessary resolution(s) by the Shareholders (where applicable, the Independent Shareholders) at the SGM approving the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue, and upon the Share Consolidation and the Increase in Authorised Share Capital becoming effective, the Company will, on or around Wednesday, 15 February 2012, send the Prospectus Documents to the Qualifying Shareholders; and whereas the Prospectus to the NonQualifying Shareholders for information purpose only.

DEFINITIONS

In this announcement, unless the context otherwise required, the following terms and expressions shall have the following meanings when used herein.

“acting in concert” has the meaning ascribed to it under the Takeovers Code

“associate(s)” has the meaning ascribed to it in the Listing Rules
“Board” board of Directors
“Bonus Warrant(s)”
bonus warrant(s) to be issued by the Company to the successful applicants of the Rights Shares pursuant to the Rights Issue on the basis of one (1) bonus warrant for every five (5) Rights Shares taken up, conferring rights on the holder(s) thereof to subscribe for the Bonus Warrant Shares at the Exercise Price of HK$0.10 per Consolidated Share (subject to adjustments)
“Bonus Warrant Issue” the proposed issue of the Bonus Warrants on the basis of one Bonus Warrant for every five Rights Shares taken up under the Rights Issue
“Bonus Warrant Share(s)” Consolidated Share(s) to be issued by the Company upon exercise of the subscription rights attaching to the Bonus Warrants
“Business Day”
a day (other than a Saturday, a Sunday or days on which a typhoon signal no. 8 or above or black rainstorm signal is hoisted in Hong Kong between 9:00 a.m. to 5:00 p.m.) on which banks in Hong Kong are generally open for business
“Bye-Laws”

the bye-laws of the Company

“CCASS”

The Central Clearing and Settlement System established and operated by HKSCC

“Chung Nam”
Chung Nam Securities Limited, a corporation licensed to carry out type 1 (dealing in securities) regulated activities within the meaning of the SFO
“Company”
Beijing Yu Sheng Tang Pharmaceutical Group Limited (Stock Code: 1141), a company incorporated in Bermuda with limited liability and the shares of which are listed on main board of the Stock Exchange
“Companies Act”
Companies Act 1981 of Bermuda (as amended)
“Companies Ordinance”
the Companies Ordinance (Chapter 32 of the Laws of Hong Kong)
“connected person(s)”
has the meaning ascribed to it in the Listing Rules
“Consolidated Share(s)”
consolidated share(s) of HK$0.10 each in the issued and unissued share capital of the Company immediately after the completion of the Share Consolidation
“Director(s)” director(s) of the Company
“EAF(s)”
the form(s) of application for use by the Qualifying Shareholders who wish to apply for excess Rights Shares, being in such usual form as may be agreed between the Company and the Underwriters
“Exercise Price”
the price payable for each Bonus Warrant Share on exercise of the subscription rights attached to the Bonus Warrants, which is initially set at HK$0.10 per Consolidated Share (subject to adjustments)
“Excelsior Kingdom”
Excelsior Kingdom Limited, a company incorporated in the British Virgin Islands with limited liability, whose entire issued capital is beneficially owned by Mr. Suen

“Global Wealthy”

“Group”
“HKSCC”
“Hong Kong”
“Increase in Authorised Share Capital”
“Independent Board Committee”
“Independent Financial Adviser”
“Independent Shareholders”

Global Wealthy Limited, a company incorporated in the British Virgin Islands with limited liability, is a wholly owned subsidiary of Excelsior Kingdom, which in turn is wholly owned by Mr. Suen, an Executive Director and the Chairman of the Company and is a Shareholder of the Company as at the date of this announcement. The ordinary business of Global Wealthy does not include underwriting

the Company and its subsidiaries
Hong Kong Securities Clearing Company Limited

the Hong Kong Special Administrative Region of the People’s Republic of China

the proposed increase in the authorised share capital of the Company from HK$100,000,000 divided into 1,000,000,000 Consolidated Shares to HK$1,000,000,000 divided into 10,000,000,000 Consolidated Shares
a committee of the Board, comprising all the Independent Non-executive Directors, namely Mr. Wong Kwok Tai, Mr. Weng Yixiang and Mr. Lu Xinsheng, has been formed to advise the Independent Shareholders in relation to the Rights Issue and the Bonus Warrant Issue
Proton Capital Limited, a corporation licensed to carry on Type 6 (advising on corporate finance) regulated activity under the SFO, has been appointed by the Company and approved by the Independent Board Committee to advise the Independent Board Committee and the Independent Shareholders in relation to the Rights Issue and the Bonus Warrant Issue
the Shareholder(s), other than the Directors (excluding the Independent Non-executive Directors), the chief executive of the Company and their respective associates, including but not limited to, Mr. Suen and parties acting in concert with him, who are not involved in, nor interested in, the Underwriting Agreement and the Irrevocable Undertakings

“Irrevocable Undertakings”

irrevocable undertakings dated 20 December 2011 under which Mr. Suen, Excelsior Kingdom and Global Wealthy provided the irrevocable undertakings to the Company and Chung Nam as described under the section headed “Irrevocable Undertakings” in this announcement

“Last Trading Day”

Tuesday, 20 December 2011, being the last trading day of the Shares on the Stock Exchange prior to the publication of this announcement

“Latest Time for Acceptance”
4:00 p.m. on Thursday, 1 March 2012 or such later time or date as may be agreed between the Company and the Underwriters, being the latest time for acceptance of and payment for, the Rights Shares and the application for excess Rights Shares in the manner as set out in the Prospectus (or such other time or date as the Underwriters and the Company may agree in writing)
“Latest Time for Termination”
4:00 p.m. on Tuesday, 6 March 2012 or such later time or date as may be agreed between the Company and the Underwriters, being the latest time to terminate the Underwriting Agreement
“Listing Committee”
the listing sub-committee of the board of the Stock Exchange
“Listing Rules”
the Rules Governing the Listing of Securities on Stock Exchange
“Mr. Suen”
Mr. Suen Cho Hung, Paul, an Executive Director and the Chairman of the Company
“Non-Qualifying Shareholders whose names appear on the register of Shareholder(s)” members of the Company as at the close of business on the Record Date and whose addresses as shown on such register are outside Hong Kong where the Directors, based on opinions provided by its legal advisers, consider it necessary or expedient not to offer the Rights Shares to such Shareholders on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place

“Overseas Shareholders”

the Shareholders with registered addresses on the register of members of the Company which are outside Hong Kong on the Record Date

“PAL”
the renounceable provisional allotment letter(s) proposed to be issued to the Qualifying Shareholders in connection with the Rights Issue
“Prospectus”
the prospectus to be despatched to the Shareholders on the Prospectus Posting Date in connection with the Rights Issue and the Bonus Warrant Issue in such form as may be agreed between the Company and the Underwriters
“Prospectus Documents”
the Prospectus, PAL and EAF
“Prospectus Posting Date”
Wednesday, 15 February 2012 or such later date as may be agreed between the Underwriters and the Company for the despatch of the Prospectus Documents
“Qualifying Shareholder(s)” the Shareholder(s), other than the Non-Qualifying Shareholders, whose name(s) appear(s) on the register of members of the Company as at the close of business on the Record Date
“Record Date”
Monday, 13 February 2012, or such other date as may be agreed by the Company and the Underwriters, being the date by reference to which entitlements to the Rights Issue will be determined
“Rights Issue”
the proposed rights issue on the basis of five (5) Rights Shares for every one (1) Consolidated Share in issue and held on the Record Date at the Subscription Price
“Rights Shares”
2,471,087,850 Consolidated Shares proposed to be offered to the Qualifying Shareholders for subscription on the basis of five (5) Rights Shares for every one (1) Consolidated Share held at the Record Date pursuant to the Rights Issue
“SFO”
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“SGM”

the special general meeting of the Company to be convened and held at 9:00 a.m. on Wednesday, 1 February 2012 to consider and approve, among other things, the proposed Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Bonus Warrant Issue
“Share(s)”
ordinary share(s) of HK$0.01 each in the share capital of the Company prior to the implementation of the Share Consolidation
“Shareholder(s)” holder(s) of the Shares or the Consolidated Shares, as the case may be
“Share Consolidation” the proposed consolidation of every ten issued and unissued Shares of HK$0.01 each into one Consolidated Share of HK$0.10 each
“Share Options” the share options granted under the share option scheme adopted by the Company on 30 December 2002
“Specified Event” an event occurring or matter arising on or after the date of the Underwriting Agreement and prior to the Latest Time for Termination which if it had occurred or arisen before the date hereof would have rendered any of the warranties contained in the Underwriting Agreement untrue or incorrect in any material respect
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“Subscription Price”
HK$0.13 per Rights Share under the Rights Issue
“Takeovers Code”
the Hong Kong Code on Takeovers and Mergers
“Underwritten Shares”
2,247,370,920 Rights Shares (total 2,471,087,850 Rights Shares less 223,716,930 Rights Shares to be provisionally allotted to Global Wealthy and Mr. Suen and will be taken up by them pursuant to the Irrevocable Undertakings) to be fully underwritten by the Underwriters pursuant to the terms and conditions of the Underwriting Agreement
“Underwriters”
Global Wealthy and Chung Nam

“Underwriting Agreement”

the underwriting agreement dated 20 December 2011 entered into between the Company and the Underwriters in relation to the underwriting arrangement in respect of the Rights Issue

“HK$”

“%”

Hong Kong dollars, the lawful currency of Hong Kong per cent.

By Order of the Board Beijing Yu Sheng Tang Pharmaceutical Group Limited Suen Cho Hung, Paul Chairman

Hong Kong, 20 December 2011

As at the date of this announcement, the Board comprises Mr. Suen Cho Hung, Paul (Chairman), Mr. Sue Ka Lok (Chief Executive Officer), Mr. Bai Jianjiang and Ms. Lee Chun Yeung, Catherine as Executive Directors and Mr. Wong Kwok Tai, Mr. Weng Yixiang and Mr. Lu Xinsheng as Independent Non-executive Directors.

AI assistant

PegBio Co., Ltd. — Capital/Financing Update 2011

50676_rns_2011-12-20_36651cd8-d6fb-4407-a570-16f37c9fcd12.pdf

BEIJING YU SHENG TANG PHARMACEUTICAL GROUP LIMITED 北京御生堂藥業集團有限公司[*]

PROPOSED SHARE CONSOLIDATION; PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; CHANGE IN BOARD LOT SIZE; AND

UNDERWRITERS CHUNG NAM SECURITIES LIMITED GLOBAL WEALTHY LIMITED

PROPOSED SHARE CONSOLIDATION

INCREASE IN AUTHORISED SHARE CAPITAL

CHANGE IN BOARD LOT SIZE

PROPOSED RIGHTS ISSUE

IMPLICATION UNDER THE LISTING RULES

GENERAL

PROPOSED SHARE CONSOLIDATION

Effects of the Share Consolidation

Reasons for the Share Consolidation

Conditions of the Share Consolidation

Listing and Dealings

Free Exchange of Consolidated Share Certificates and Trading Arrangement

Arrangement for Matching Service for Odd Lots

INCREASE IN AUTHORISED SHARE CAPITAL

CHANGE IN BOARD LOT SIZE

PROPOSED RIGHTS ISSUE

Issue Statistics

Qualifying Shareholders and Non-Qualifying Shareholders

Closure of Register of Members

Basis of the Provisional Allotment

Rights of the Overseas Shareholders

Application for Excess Rights Shares

Subscription Price

Bonus Warrant Issue

Basis of determining the Subscription Price and the Exercise Price

Fractions of the Rights Shares and the Bonus Warrants (if any)

Certificates for the Rights Shares, the Bonus Warrants and Refund Cheques

Status of the Rights Shares and the Bonus Warrant Shares

Specific Mandate to Allot and Issue the Bonus Warrant Shares

Application for Listing

Irrevocable Undertakings

CONDITIONS PRECEDENT TO THE RIGHTS ISSUE, THE BONUS WARRANT ISSUE AND THE UNDERWRITING AGREEMENT

UNDERWRITING ARRANGEMENT

The Underwriting Agreement

Termination or Rescission of the Underwriting Agreement

REASONS FOR THE RIGHTS ISSUE AND THE BONUS WARRANT ISSUE AND INTENDED USE OF PROCEEDS

POSSIBLE ADJUSTMENT TO THE SHARE OPTIONS

FUND RAISING EXERCISES OF THE COMPANY DURING THE PAST 12 MONTHS

EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY

EXPECTED TIMETABLE FOR THE SHARE CONSOLIDATION, CHANGE IN BOARD LOT SIZE, RIGHTS ISSUE AND BONUS WARRANT ISSUE

2012

Note:

IMPLICATION UNDER THE LISTING RULES

WARNING OF THE RISKS OF DEALING IN THE SHARES AND THE NIL-PAID RIGHTS SHARES AND/OR TAKING UP THE RIGHTS SHARES

GENERAL

DEFINITIONS

By Order of the Board Beijing Yu Sheng Tang Pharmaceutical Group Limited Suen Cho Hung, Paul Chairman

More from PegBio Co., Ltd.

PegBio Co., Ltd. Capital/Financing Update 2011

**BEIJING YU SHENG TANG PHARMACEUTICAL GROUP LIMITED 北京御生堂藥業集團有限公司[*]**