Sinco Pharmaceuticals Holdings Limited — Proxy Solicitation & Information Statement 2009

Nov 23, 2009

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult a licensed securities dealer or other bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares of Sino Biopharmaceutical Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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(Incorporated in the Cayman Islands with limited liability) Website: www.sinobiopharm.com (Stock code: 1177)

(1) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL (2) PROPOSED BONUS ISSUE OF SHARES

A notice convening the extraordinary general meeting of Sino Biopharmaceutical Limited to be held at 10:00 a.m. on Thursday, 10 December, 2009 at 7th Floor, Board Room, The Dynasty Club Limited, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong is set out on pages 12 to 13 of this circular. Whether or not you are able to attend the extraordinary general meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the principal place of business of the Company at Unit 09, 41st Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding such meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so wish.

24 November, 2009

CONTENTS

	Page
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . .	12

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EXPECTED TIMETABLE

The expected timetable is set out below:–

Despatch of circular and notice of
the EGM to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 24 November, 2009
Last day of dealings in Shares cum-entitlement to
Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 3 December, 2009
First day of dealings in Shares ex-entitlement to
Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 4 December, 2009
Latest time for lodging transfers of Shares for
entitlement to Bonus Shares . . . . . . . . . . . . . . . 4:00 p.m. on Monday, 7 December, 2009
Closure of register of members of the Company . . . . . . . . . . Tuesday, 8 December, 2009 to
Thursday, 10 December, 2009
(both days inclusive)
Latest date and time to return form of
proxy for the EGM . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Tuesday, 8 December, 2009
Record Date for determination of entitlement to
Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 10 December, 2009
Extraordinary General Meeting . . . . . . . . . . . . 10:00 a.m. on Thursday, 10 December, 2009
Register of Members re-opens . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 11 December, 2009
Despatch of the certificates for Bonus Shares . . . . . . . . . . . . . Monday, 28 December, 2009
Commencement of dealings in Bonus Shares . . . . . . . . . . . . . . . . Monday, 4 January, 2010

Note: All time refers to Hong Kong local time in this circular.

Dates or deadlines specified in this circular are indicative only and may be varied by the Company. Any consequential changes to the expected timetable will be published or notified to the Shareholders as and when appropriate.

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DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

• “Board”

• the board of Directors;

• “Bonus Issue” the proposed issue of Bonus Shares to Qualifying Shareholders on the basis of one Bonus Share for every two existing Shares held on the Record Date upon and subject to the terms of this circular;

• “Bonus Share(s)” new Shares to be allotted and issued pursuant to the Bonus Issue;

• “CCASS” Central Clearing and Settlement System operated by Hong Kong Exchanges and Clearing Limited;

• “Companies Law” the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands;

• “Company” Sino Biopharmaceutical Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange;

• “Directors” directors of the Company;

• “EGM”

• the extraordinary general meeting of the Company to be held at 10:00 a.m. on Thursday, 10 December, 2009 to consider and, if thought fit, to approve the Increase in Authorised Share Capital and the Bonus Issue;

• “Excepted Shareholder(s)”

• those Overseas Shareholders in relation to whom the Board, after making enquiries pursuant to Rule 13.36 of the Listing Rules, considers it necessary or expedient on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant body or stock exchange in that place not to extend the Bonus Issue to them;

• “Group” the Company and its subsidiaries;

• “HKSCC”

• Hong Kong Securities Clearing Company Limited;

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC;

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DEFINITIONS

• “Increase in Authorised Share Capital”

• proposed increase in the existing authorised share capital of the Company from HK$100,000,000 divided into 4,000,000,000 Shares of HK$0.025 each to HK$150,000,000 divided into 6,000,000,000 Shares of HK$0.025 each by the creation of an additional 2,000,000,000 Shares of HK$0.025 each;

• “Latest Practicable Date” 17 November, 2009, being the latest practicable date for the purpose of ascertaining certain information referred to in this circular;

• “Listing Committee” the listing committee of the Stock Exchange;

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;

• “Macau” Macau Special Administrative Region of the PRC;

• “Overseas Shareholders” holders of Shares whose addresses as shown on the Register of Members on the Record Date are outside Hong Kong;

• “PRC”

• the People’s Republic of China (for the purpose of this circular, excluding Hong Kong, Macau and Taiwan);

• “Qualifying Shareholder(s)” Shareholder(s), other than the Excepted Shareholder(s), who are entitled to the Bonus Issue;

• “Record Date” 10 December, 2009, being the record date for the determination of entitlements to the Bonus Shares;

• “Register of Members” the principal or branch register of members of the Company maintained in the Cayman Islands or Hong Kong respectively;

• “Registrar” Tricor Tengis Limited, Hong Kong branch share registrar and transfer office of the Company at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong;

• “Share(s)”

• share(s) of HK$0.025 each in the share capital of the Company;

• “Shareholders”

• holder(s) of Shares;

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DEFINITIONS

“Stock Exchange” The Stock Exchange of Hong Kong Limited; and “HK$” Hong Kong dollars, the lawful currency of Hong Kong.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability) Website: www.sinobiopharm.com

(Stock code: 1177)

Executive Directors:

Mr. Tse Ping (Chairman) Mr. Zhang Baowen Mr. Xu Xiaoyang Mr. Tse Hsin Ms. Cheng Cheung Ling Mr. Tao Huiqi Mr. He Huiyu

Registered Office: Codan Trust Company (Cayman) Limited Century Yard Cricket Square Hutchins Drive P.O. Box 2681GT George Town Grand Cayman British West Indies

Independent non-executive Directors:

Mr. Lu Zhengfei Mr. Li Dakui Ms. Li Jun

Head office and principal place of business:

Unit 09, 41st Floor Office Tower Convention Plaza 1 Harbour Road Wanchai Hong Kong

24 November, 2009

To the Shareholders

Dear Sirs,

(1) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL (2) PROPOSED BONUS ISSUE OF SHARES

INTRODUCTION

References are made to the announcement made by the Company dated 11 November, 2009 in relation to the Increase in Authorised Share Capital, the Bonus Issue and the book closure date. This circular provides you with information relating to the Increase in Authorised Share Capital and the Bonus Issue, and to give you notice of the EGM.

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LETTER FROM THE BOARD

1. PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

As at the Latest Practicable Date, the authorised share capital of the Company was HK$100,000,000 comprising 4,000,000,000 Shares of HK$0.025 each, out of which 3,018,624,982 Shares have been issued and are fully paid.

The Board proposes to increase the authorised share capital to HK$150,000,000 comprising 6,000,000,000 Shares of HK$0.025 each by the creation of an additional 2,000,000,000 Shares of HK$0.025 each.

Immediately after the completion of the Increase in Authorised Share Capital and assuming no new Shares are issued or repurchased from the date hereof prior to the EGM, the authorised share capital of the Company will be HK$150,000,000 divided into 6,000,000,000 Shares of HK$0.025 each, with 3,018,624,982 issued Shares and 2,981,375,018 unissued Shares. Assuming the Bonus Issue becomes effective, 1,509,312,491 unissued Shares (out of the aforementioned 2,981,375,018 unissued Shares) created by the Increase in Authorised Share Capital will be issued and allotted as Bonus Shares.

Reasons for Increase in Authorised Share Capital

The Board proposes the Increase in Authorised Share Capital in order to accommodate future expansion and growth of the Group and to facilitate the Bonus Issue. The Board believes that the Increase in Authorised Share Capital is for the benefit of the Company and the Shareholders as a whole.

Condition of the Increase in Authorised Share Capital

The Increase in Authorised Share Capital is conditional upon the passing of an ordinary resolution by the Shareholders at the EGM and no Shareholder is required to abstain from voting on such resolution.

2. PROPOSED BONUS ISSUE OF SHARES

In view of the Group’s financial performance so far, the Directors have recommended the Bonus Issue to the Shareholders. The Directors also believe that the Bonus Issue will increase the Company’s capital base and enhance the liquidity of the Shares in the market and thereby enlarge the Company’s shareholder base.

Basis of Bonus Issue

Subject to the conditions set out under the heading “Conditions of the Bonus Issue” below, the Bonus Issue is proposed to be made on the basis of one (1) Bonus Share for every two (2) existing Shares held on the Record Date by the Qualifying Shareholders. The Bonus Shares will be issued and credited as fully paid at par.

As at the Latest Practicable Date, there were 3,018,624,982 Shares in the issued share capital of the Company. On the basis that no further Shares are issued or repurchased on or before 10 December, 2009, being the date of the EGM and the

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LETTER FROM THE BOARD

Record Date, it is anticipated that 1,509,312,491 (or thereabout) Bonus Shares will be issued under the Bonus Issue and the amount of approximately HK$37,732,812.30 (or thereabout), being part of the Company’s share premium account, will be capitalised and accordingly such sum will be applied in paying up in full at par for 1,509,312,491 (or thereabout) Bonus Shares. After completion of the Bonus Issue, there will be a total of 4,527,937,473 (or thereabout) Shares in the enlarged issued share capital of the Company. The Bonus Shares will represent approximately 50 per cent. of the existing issued share capital of the Company and approximately 33.3 per cent. of the enlarged issued share capital of the Company.

The exact total number of Bonus Shares to be issued under the Bonus Issue will not be capable of determination until the Record Date.

Conditions of the Bonus Issue

The Bonus Issue is conditional upon:–

• (i) the passing at the EGM of an ordinary resolution to approve the Increase in Authorised Share Capital;

• (ii) the passing at the EGM of an ordinary resolution to approve the Bonus Issue;

• (iii) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in the Bonus Shares; and

• (iv) compliance with the relevant legal procedures and requirements under the Companies Law to effect the Bonus Issue.

The Bonus Shares to be issued pursuant to the Bonus Issue will, subject to the Memorandum and Articles of Association of the Company, rank pari passu in all respects with the existing issued Shares of the Company with effect from the date of issue, except that they will not be entitled to the third quarterly dividend for the year ending 31 December, 2009 or the Bonus Issue.

The number of Bonus Shares to be issued under the Bonus Issue to each Shareholder will be rounded down to the nearest whole number. No fractional Shares (if any) will be issued and Shares representing fractions will be aggregated and sold. The proceeds of sale will be retained for the benefit of the Company.

In the absence of any specific instruction to the contrary received in writing by the Registrar, certificates in respect of the Bonus Shares will be sent to the persons entitled thereto at their respective addresses shown in the Register of Members or in the case of joint holders, to the address of the joint holder whose name stands first in the Register of Members in respect of the joint holding. It is expected that certificates for the Bonus Shares will be posted to those entitled thereto at their own risk on 28 December, 2009.

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LETTER FROM THE BOARD

Commencement of dealings in the Bonus Shares

Application will be made to the Listing Committee of the Stock Exchange for the listing of and permission to deal in the Bonus Shares to be issued pursuant to the Bonus Issue. It is expected that the dealing of Bonus Shares on the Stock Exchange will commence on 4 January, 2010.

Subject to the granting of the listing of and permission to deal in the Bonus Shares on the Stock Exchange as well as compliance with the stock admission requirements of HKSCC, the Bonus Shares will be accepted as eligible securities for deposit, clearance and settlement in CCASS established and operated by HKSCC. Dealings in the Shares may be settled through CCASS. Investors should seek the advice of their licensed securities dealers or other professional advisers for details of these settlement arrangements and how such arrangements will affect their rights and interests.

No part of the share capital of the Company is listed or dealt in on any other stock exchange and no such listing or permission to deal is being or proposed to be sought. The Bonus Shares will not be listed or traded on any other stock exchange other than the Stock Exchange and no such listing or permission to deal is being or proposed to be sought. Dealings in the Bonus Shares will be subject to the payment of stamp duty in Hong Kong.

Reasons for the proposed Bonus Issue

In view of the Group’s financial performance so far in the current financial year, the Board decided to propose the Bonus Issue. In addition to that, the Directors believe that the Bonus Issue will increase the Company’s capital base and enhance the liquidity of the Shares in the market and thereby enlarging the Company’s shareholder and capital base.

Overseas Shareholders

Overseas Shareholders will not be allotted the Bonus Shares if the Directors consider such exclusion to be necessary or expedient 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. In such circumstances, arrangements will be made for the Bonus Shares which would otherwise have been issued to the Excepted Shareholders, if any, to be sold in the market as soon as practicable after dealing in the Bonus Shares commences. Any net proceeds of sale, after deduction of expenses, will be distributed in Hong Kong dollars to the Excepted Shareholders, if any, pro rata to their respective shareholdings and remittances therefor will be posted to them, at their own risk, unless the amount falling to be distributed to any such persons is less than HK$100.00, in which case it will be retained for the benefit of the Company.

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LETTER FROM THE BOARD

Based on the register of members of the Company as at the Latest Practicable Date, there were 3 Overseas Shareholders with registered addresses which are jurisdictions outside Hong Kong. Details are as follows:

	No. of
Jurisdiction of registered address of	Overseas
Overseas Shareholders	Shareholders
PRC	1
Singapore	1
The Philippines	1

Pursuant to Rule 13.36 of the Listing Rules, the Board has made enquiries with its legal advisers in PRC, Singapore and the Philippines as to whether there is any legal restriction under the applicable securities legislation of PRC, Singapore and the Philippines respectively or requirement of any relevant regulatory body or stock exchange with respect to the offer of Bonus Shares to such Overseas Shareholders. Based on the advice of the Company’s legal advisers on the laws of PRC, Singapore and the Philippines respectively, the Bonus Shares can be issued and allotted to the Overseas Shareholders with registered addresses in PRC, Singapore and the Philippines.

Closure of Register of Members

The Register of Members of the Company will be closed from Tuesday, 8 December, 2009 to Thursday, 10 December, 2009, both days inclusive, during which period no transfer of shares will be effected in order to determine the entitlement of Shareholders under the Bonus Issue. In order to qualify for the Bonus Shares, all transfers accompanied by the relevant share certificates must be lodged with the Registrar at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 4:00 p.m. on Monday, 7 December, 2009.

EXPECTED TIMETABLE

The expected timetable for the Bonus Issue is set out on page 1 of this circular. Dates or deadlines specified in this circular are indicative only and may be varied by the Company. Any consequential changes to the expected timetable will be published or notified to the Shareholders as and when appropriate.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the principal place of business of the Company in Hong Kong at Unit 09, 41st Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong during normal business hours on any weekday other than public holidays, from the date of this circular up to and including the date of the EGM:

• (1) the memorandum of association and articles of association of the Company;

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LETTER FROM THE BOARD

• (2) a summary of the Companies Law of the Cayman Islands; and

• (3) the annual reports of the Company for the two years ended 31 December, 2007 and 2008.

EGM

At the EGM, the relevant resolutions will be proposed for the Shareholders to consider and, if thought fit, approve the Increase in Authorised Share Capital and the Bonus Issue.

The Directors confirm that none of the Shareholders will be required to abstain from voting at the EGM.

The notice convening the EGM is set out on pages 12 to 13 of the circular. Whether or not you intend to attend the meeting, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the principal place of business of the Company at Unit 09, 41st Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjourned meeting if you so wish.

In line with the recent changes to the Listing Rules whereby all resolutions at general meeting must be taken by poll, the chairman of the EGM will demand for a poll for all resolutions put forward thereat.

RECOMMENDATION

The Directors believe that the Increase in Authorised Share Capital and the Bonus Issue is in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to approve the above matters to be proposed at the EGM.

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LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained in this circular, the omission of which would make any statement herein misleading.

Yours faithfully, For and on behalf of the Board SINO BIOPHARMACEUTICAL LIMITED Tse Ping Chairman

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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(Incorporated in the Cayman Islands with limited liability) Website: www.sinobiopharm.com (Stock code: 1177)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Sino Biopharmaceutical Limited (the “Company”) will be held at 10:00 a.m. on Thursday, 10 December, 2009 at 7th Floor, Board Room, The Dynasty Club Limited, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions which will be proposed as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

1. “ THAT the authorised share capital of the Company be and is hereby increased from HK$100,000,000 divided into 4,000,000,000 Shares of HK$0.025 (the “Shares”) each to HK$150,000,000 divided into 6,000,000,000 Shares by the creation of an additional 2,000,000,000 new Shares of HK$0.025 each in the Company.”

2. “ THAT , subject to and conditional upon resolution no. 1 being passed and subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited granting and agreeing to grant listing of and permission to deal in the Bonus Shares (as hereinafter defined):

3. (A) upon the recommendation of the directors of the Company (the “Directors”), such sum as shall be equal to the aggregate amount required to pay up in full the Bonus Shares required to below at their nominal amount of HK$0.025 per Share, being part of the Company’s share premium account, be capitalised and accordingly such sum be applied in paying up in full at par 1,509,312,491 (or thereabout) shares of HK$0.025 each in the capital of the Company (“Bonus Shares”), such Bonus Shares to be allotted and issued and distributed (subject to paragraph (C) below) credited as fully paid among the persons whose names appear on the registers of members of the Company at the close of business on Thursday, 10 December, 2009 and whose addresses as shown in such registers are in Hong Kong or whose addresses as shown in such registers are outside Hong Kong if the Directors, based on legal opinions, do not consider it necessary or expedient to exclude any such shareholders of the Company on account either of the legal restrictions under the laws of the place of its registered address or the requirements of the relevant regulatory body or stock exchange in that place, on the basis of one Bonus Share for every two existing shares of HK$0.025 each in the capital of the Company (“Shares”) held;

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (B) such Bonus Shares shall not rank for the third quarterly dividend for the year ending 31 December, 2009, or the issue of Bonus Shares pursuant to the authority of this resolution but shall, subject to the Memorandum of Association and Articles of Association of the Company, rank pari passu in all other respects with the existing issued Shares;

• (C) no fractional Bonus Shares shall be allotted and distributed as aforesaid, but the fractional entitlements shall be aggregated, rounded down to the nearest whole number and sold for the benefit of the Company; and

• (D) the Directors be authorised to do all acts and things as may be necessary or expedient in relation to the bonus issue of Bonus Shares, including, but not limited to, determining the amount to be capitalized out of the share premium account of the Company and the number of Bonus Shares to be allotted and distributed in the manner referred to in paragraph (A) of this resolution.”

By Order of the Board Leung Sau Fung, Fanny Company Secretary

Hong Kong, 24 November, 2009

Notes:

1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy must be deposited at the principal place of business of the Company at Unit 09, 41st Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney or authority not less than 48 hours before the time appointed for the holding of the meeting.

As at the date hereof, the Board of the Company comprises seven Executive Directors, namely Mr. Tse Ping, Mr. Zhang Baowen, Mr. Xu Xiaoyang, Mr. Tse Hsin, Ms. Cheng Cheung Ling, Mr. Tao Huiqi and Mr. He Huiyu and three Independent Non-Executive Directors, namely Mr. Lu Zhengfei, Mr. Li Dakui and Ms. Li Jun.

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