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

Sep 23, 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.

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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)

REPURCHASE OF CONVERTIBLE NOTES

The Company has today repurchased, under the terms and conditions of the Convertible Notes, all of the outstanding Convertible Notes in the principal amount of HK$189,100,000 at a price of HK$187,209,000, representing a discount of 1% on the principal amount of the Repurchased Notes. The holders of the Repurchased Notes also agreed that the accrued interests of the Repurchased Notes in the amount of approximately HK$1,233,000 calculated up to the date of repurchase of the Repurchased Notes be waived.

The Board of Directors (the “Board”) of Beijing Yu Sheng Tang Pharmaceutical Group Limited (the “Company”) announces that the Company has today repurchased, under the terms and conditions of the convertible notes issued by the Company on 28 January 2010 (the “Convertible Notes”), all of the outstanding Convertible Notes in the principal amount of HK$189,100,000 (the “Repurchased Notes”) at a price of HK$187,209,000, representing a discount of 1 % on the principal amount of the Repurchased Notes. The holders of the Repurchased Notes also agreed that the accrued interests of the Repurchased Notes in the amount of approximately HK$1,233,000 calculated up to the date of repurchase of the Repurchased Notes be waived. The Repurchased Notes, if they had remained outstanding, would have entitled the holders to convert the Repurchased Notes, at the conversion price of HK$0.62 per share, into 305,000,000 ordinary shares of HK$0.01 each in the capital of the Company, representing approximately 7.41% and 6.90% respectively of the existing issued share capital of the Company and the issued share capital of the Company as enlarged by such conversions, and, if not converted, would have fallen due for repayment upon maturity on 27 January 2013 and is interest-bearing at 1% per annum.

The repurchase of the Repurchased Notes has been made by the Company from internal resources. In view of the repurchase of the Repurchased Notes at an 1% discount on the principal amount of such notes, the waiving of the accrued interests on the Repurchased Notes and the cancellation of the Repurchased Notes can alleviate interest expenses of the Company, the Board is of the view that it is in the interest of the Company and its shareholders as a whole to repurchase the Repurchased Notes before their maturity dates.

By Order of the Board Suen Cho Hung, Paul Chairman

Hong Kong, 23 September 2011

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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.

* For identification purpose only

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