Sinco Pharmaceuticals Holdings Limited — Proxy Solicitation & Information Statement 2018

Apr 25, 2018

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt to any aspect of this circular or as to the action to be taken, you should consult your stockbrokers, licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in 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, stockbrokers, licensed securities dealer, registered institution in securities 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.

==> picture [217 x 124] intentionally omitted <==

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

GENERAL MANDATES TO ISSUE AND BUY BACK SHARES, RE-ELECTION OF DIRECTORS, BONUS ISSUE OF SHARES,

AND

NOTICE OF ANNUAL GENERAL MEETING

This circular is despatched together with the 2017 annual report of Sino Biopharmaceutical Limited which includes the directors’ report, the independent auditors’ report and the financial statements of Sino Biopharmaceutical Limited for the year ended 31 December 2017.

A notice convening the annual general meeting of Sino Biopharmaceutical Limited to be held at 10:00 a.m. on Tuesday, 29 May 2018 at 7th Floor, Dynasty I, The Dynasty Club Limited, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong is set out on pages 17 to 22 of this circular. Whether or not you are able to attend the annual general meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of 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.

25 April 2018

CONTENTS

			Page
**EXPECTED **	TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
DEFINITIONS		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
**LETTER FROM **		THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX	–	EXPLANATORY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . .	14
NOTICE OF	ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . .		17

– i –

EXPECTED TIMETABLE

The expected timetable for the Bonus Issue is set out below:

Date (2018)
(Hong Kong time)
Despatch of circular and notice of AGM . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 25 April
Latest time for lodging transfer of Shares for entitlement to
the right to attend and vote at the AGM . . . . . . . . . . . . . . 4:30 p.m., Wednesday, 23 May
Closure of register of members for determining entitlement
to attend and vote at AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . From Thursday, 24 May
to Tuesday, 29 May
(both days inclusive)
Latest time for lodging the proxy form for the AGM . . . . . . . . 10:00 a.m. Sunday, 27 May
AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00 a.m., Tuesday, 29 May
Publication of poll results announcement of AGM . . . . . . . . . . . . . . . . . . Tuesday, 29 May
Last day of dealings in Shares on a cum-entitlement basis
relating to the Bonus Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 1 June
First day of dealings in Shares on an ex-entitlement basis
relating to the Bonus Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 4 June
Latest time for lodging the transfer documents for
entitlement to the Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m., Tuesday, 5 June
Closure of register of members for determining entitlement
to the Bonus Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . From Wednesday, 6 June
to Monday, 11 June
(both days inclusive)
Record Date for determining entitlement to the Bonus Shares . . . . . . . . . . Monday, 11 June
Register of members re-opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 12 June
Despatch of certificates of the Bonus Shares . . . . . . . . . . . . . . . . . . . . . . Tuesday, 19 June
First date of dealings in the Bonus Share . . . . . . . . . . . . . . . 9:00 a.m., Wednesday, 20 June

– 1 –

DEFINITIONS

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

“AGM” the annual general meeting of the Company to be held at 10:00 a.m. on Tuesday, 29 May 2018 to consider and, if thought fit, to approve, among other things, the Bonus Issue, the grant to the Directors of the Share Issue Mandate and the Share Buy-back Mandate and the re-election of Directors

• “Articles” the articles of association of the Company

• “Board” the board of Directors

• “Bonus Issue” the proposed bonus issue of the Bonus Shares on the basis of one Bonus Share for every two existing Shares held on the Record Date

• “Bonus Shares” the new Shares proposed to be issued under the Bonus Issue

• “CCASS” the Central Clearing and Settlement System established and operated by HKSCC

• “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 (Stock Code: 1177)

• “Directors” directors of the Company

• “Group” the Company and its subsidiaries

• “HKSCC” Hong Kong Securities Clearing Company Limited

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

• “Latest Practicable Date” 20 April 2018, 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

– 2 –

DEFINITIONS

• “Non-qualifying the Overseas Shareholder(s) whom the Board, after making Shareholders” enquiries, considers it necessary or expedient on account either of legal restrictions under the laws of the relevant place or the requirements of any relevant foreign regulatory body or stock exchange in that place not to extend the Bonus Issue to them

• “Overseas Shareholders”

• Shareholder(s) whose name(s) appear(s) on the register of members of the Company is(are) outside Hong Kong

• “Qualifying Shareholders” holders of Shares, not being Non-qualifying Shareholders, whose addresses as shown on the register of members of the Company on the Record Date who are entitled to the Bonus Issue

• “Record Date” Monday, 11 June 2018, being the date for ascertaining the entitlement of the Shareholders to the Bonus Shares under the Bonus Issue

• “SFO” Securities and Futures Ordinance (Chapter 571 of Laws of Hong Kong)

• “Share(s)” the ordinary share(s) of nominal value of HK$0.025 each in the share capital of the Company

• “Share Buy-back Mandate”

• a general mandate proposed to be granted to the Directors which would empower the Directors to exercise the power of the Company to buy back Shares not exceeding 10% of the total number of issued shares of the Company as at the date of the AGM

• “Shareholder(s)” holder(s) of Shares

• “Share Issue Mandate”

• a general mandate proposed to be granted to the Directors to allot, issue and deal with additional Shares not exceeding 20% of the total number of issued shares of the Company as at the date of the AGM and to add to such general mandate so granted to the Directors any Shares bought back by the Company under the Share Buy-back Mandate

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

• “Takeovers Code”

• The Codes on Takeovers and Mergers and Share Buy-backs

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

• “%”

• per cent.

– 3 –

LETTER FROM THE BOARD OF DIRECTORS

==> picture [217 x 124] intentionally omitted <==

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

(Stock code: 1177)

Executive Directors: Miss Tse, Theresa Y Y (Chairlady) Mr. Tse Ping (Chief Executive Officer) Ms. Cheng Cheung Ling (Vice Chairlady) Mr. Tse Hsin Mr. Wang Shanchun Mr. Tian Zhoushan Ms. Li Mingqin

Independent non-executive Directors: Mr. Lu Zhengfei Mr. Li Dakui Ms. Lu Hong Mr. Zhang Lu Fu

Registered office: Codan Trust Company (Cayman) Limited Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Unit 09, 41st Floor, Office Tower Convention Plaza 1 Harbour Road Wanchai Hong Kong

25 April 2018

To the Shareholders

Dear Sir or Madam,

GENERAL MANDATES TO ISSUE AND BUY BACK SHARES, RE-ELECTION OF DIRECTORS AND BONUS ISSUE OF SHARES

INTRODUCTION

This circular provides you with information relating to proposals for the grant of the Share Issue Mandate, the Share Buy-back Mandate, the re-election of Directors and the Bonus Issue.

– 4 –

LETTER FROM THE BOARD OF DIRECTORS

GENERAL MANDATES TO ISSUE AND BUY BACK SHARES

At the annual general meeting of the Company held on 22 June 2017, general mandates were granted by the Company to the Directors to exercise the power of the Company to allot and issue further Shares and to buy back Shares. Such mandates will lapse upon the conclusion of the AGM (unless previously revoked or varied by ordinary resolutions of the Shareholders). At the AGM, ordinary resolutions will be proposed to seek the approval of the Shareholders to grant to the Directors general mandates:–

• (i) to allot, issue and deal with additional Shares not exceeding 20% of the total number of issued shares of the Company as at the date of the AGM, which is equivalent to the issue of a maximum of 1,685,038,865 Shares on the basis that there is no change in the total number of issued Shares from the Latest Practicable Date to the date of AGM, and to add to such general mandate so granted to the Directors any Shares bought back by the Company under the Share Buy-back Mandate; and

• (ii) to buy back Shares not exceeding 10% of the total number of issued shares of the Company as at the date of the AGM.

The general mandates if granted, will remain in effect until (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period within which the next annual general meeting of the Company is required to be held by the Articles or any applicable laws of the Cayman Islands or the Listing Rules; or (iii) the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in a general meeting of the Company, whichever is the earliest.

An explanatory statement as required by the Listing Rules to be sent to the Shareholders in connection with the Share Buy-back Mandate is set out in the Appendix to this circular.

RE-ELECTION OF DIRECTORS

In accordance with Article 87 of the Articles, Mr. Tse Ping, Ms. Li Mingqin, Mr. Lu Zhengfei and Mr. Li Dakui will retire by rotation and, being eligible, offer themselves for re-election at the AGM.

Mr. Lu Zhengfei and Mr. Li Dakui were appointed as independent non-executive Directors in November 2005 and September 2004, respectively, and have served the Board for more than nine years. Each of Mr. Lu Zhengfei and Mr. Li Dakui has confirmed his independence pursuant to Rule 3.13 of the Listing Rules. The Board considers that Mr. Lu Zhengfei and Mr. Li Dakui continue to be independent as they have satisfied all the criteria for independence set out in Rule 3.13 of the Listing Rules. At the AGM, their respective appointment will be subject to a separate resolution to be approved by the Shareholders in accordance with Code Provision A.4.3 of the Corporate Governance Code under Appendix 14 to the Listing Rules.

– 5 –

LETTER FROM THE BOARD OF DIRECTORS

Details of each of the aforesaid Directors who are proposed for re-election at the AGM are set out below:–

Mr. Tse Ping

Mr. Tse Ping（謝炳先生）, aged 66, is the founder of the Company and now serves as the Chief Executive Officer of the Company. He is responsible for the overall operations of the Group. With more than 25 years of extensive experience in investment and management in the pharmaceutical industry in China, he is currently a director of Chia Tai-Tianqing Pharmaceutical Holdings Co. Ltd., Nanjing Chia Tai Tianqing Pharmaceutical Co., Ltd., Jiangsu Chia Tai Fenghai Pharmaceutical Co., Ltd., Jiangsu Chia Tai Qingjiang Pharmaceutical Co., Ltd., Qingdao Chia Tai Haier Pharmaceutical Co., Ltd., and Beijing Tide Pharmaceutical Co. Ltd. He is also a director of Shanghai Fortune World Development Co., Ltd., Tianjin Chiatai Feed Tech Co., Ltd., SYN Energy Technology Co., Ltd. and Chia Tai Oversea Chinese Realty Development Co., Ltd., and a non-executive director of Tianjin Binhai Teda Logistics (Group) Corporation Limited, the shares of which are listed on GEM Board of the Stock Exchange. Mr. Tse is still a director of Chia Tai Qingchunbao Pharmaceutical Co., Ltd. and a council member of the Association of Pharmaceutical Biotechnology of China.

Soon after the adoption of the open-up and reform policy by China, Mr. Tse started to develop his investment and business in China. He has been engaged in the pharmaceutical industry since 1991, having made equity investments in a dozen or so enterprises, and is one of the most successful overseas investors in the PRC pharmaceutical industry. Led by Mr. Tse, CP Pharmaceutical Group now has developed to a large integrated pharmaceutical corporation, and its Hong Kong listed flagship Sino Biopharmaceutical Limited owns a number of national key high-technology enterprises. Adhering to the concept of technology innovation and building upon R&D system based on imitation as well as originality, the Group strives to develop international level, high-end biological drugs and innovative drugs and to achieve breakthroughs in different areas including medical services, medical equipment, and mergers and acquisitions, and becomes an innovation driven pharmaceutical enterprise with its business encompassing a fully integrated chain which spans from R&D to manufacture and sales of pharmaceutical products. In 2017, Sino Biopharmaceutical Limited continued to break its own record in terms of revenue and net profit, and was ranked one of the “2017 Asia’s Fab 50 Companies” by Forbes Asia, while its subsidiary was awarded the first place of “2017 Best Industrial Enterprise in the R&D of the Pharmaceutical Product Line in the PRC” by the China National Pharmaceutical Industry Information Center and ranked the first in the list of “Drug Development Capabilities in the PRC” jointly complied by www.yaozh.com and the China Pharmacy Journal.

As a recognition for his efforts in promoting the development of the pharmaceutical industry in China, Mr. Tse was awarded a number of honours, including the prize of “World Outstanding Chinese” and an honorary Doctor Degree by the University of West Alabama, United States of America in January 2008, the “2007/2008 Asian Knowledge Management Association academician” granted by the Asian Knowledge Management Association in December 2008, and the “The Top Ten Most Leading Innovative Persons of the PRC Enterprises in 2010” jointly granted by the PRC Productivity Society and the PRC Corporation Press in June 2010.

– 6 –

LETTER FROM THE BOARD OF DIRECTORS

Mr. Tse was a member of the Ninth, Tenth and Eleventh National Committee of the Chinese People’s Political Consultative Conference. He is currently the executive vice chairman of the China Overseas Chinese Entrepreneurs Association and the executive vice chairman of Beijing Private Sci-Tech Promotion Association. Mr. Tse is the father of Miss Tse, Theresa Y Y, the Chairman of the Board, and a first cousin of Mr. Tse Hsin, an Executive Director of the Company. He is also the brother of Ms. Chia Fai and a first cousin of Miss Tse Wun and Mr. Tse Hsuan, Johnny, all being senior management of the Company.

Save as disclosed, Mr. Tse has not held any directorship in any other listed company for the last three years, and Mr. Tse does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Tse owns 1,222,526,722 Shares, of which 140,400,000 Shares are held through his own interests and 1,082,126,722 Shares are held through Validated Profits Limited, the entire issued share capital of which is owned by Mr. Tse. As at the Latest Practicable Date, save as disclosed, Mr. Tse did not have any interest or short position in shares, underlying shares or debentures of the Company or any of its associated corporations within the meaning of Part XV of the SFO.

Ms. Li Mingqin

Ms. Li Mingqin（李名沁女士）, aged 59, is currently a vice president of the Company and a director of Beijing Tide Pharmaceutical Co., Ltd., Chia Tai Shaoyang Orthopedic Hospital and CP Boai Investment Ltd., and is principally responsible for the investment affairs of the Group. Ms. Li graduated from the Faculty of Medicine of Beijing Chinese Medicine University with a Bachelor Degree in medicine. Prior to joining the Company, Ms. Li had worked in Sino-Japanese Friendly Hospital and Beijing Chinese Medicine University, engaged in teaching of medicines, development of new medicines and medicine management. During the period from 1992 to 1995, Ms. Li had been engaged in post-doctorate research in the Medicine School of University of Colorado, USA and the Medical College of the University of Massachusetts. Ms. Li joined the Group in March 1997 and has 35 years of experience in the pharmaceutical industry.

Save for the positions mentioned above, Ms. Li has not previously held and is not holding any other position with the Company or any of its subsidiaries, and has not held any directorship in any other listed company in the past three years. Ms. Li does not have any relationship with any directors, senior management or any substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Ms. Li did not have any interest or short position in shares, underlying shares or debentures of the Company or any of its associated corporations within the meaning of Part XV of the SFO.

Mr. Lu Zhengfei

Mr. Lu Zhengfei（陸正飛先生）, aged 54, is an independent non-executive director of the Company and is the Chairman of the Audit Committee and a member of the Remuneration Committee and the Nomination Committee of the Company. He received a P.h.D. Degree in

– 7 –

LETTER FROM THE BOARD OF DIRECTORS

Economics (financial management). Mr. Lu is currently a Distinguished Professor of Chang Jiang Scholars and supervisor of doctoral students of the Guanghua School of Management of Peking University. He had previously held various senior positions in the Department of Accounting of both Peking University and Nanjing University. He is a standing council member of the China Accounting Association and the deputy director of its Financial Management Committee and was also an expert consultant of the China Financial Accounting Standards Board, Ministry of Finance. Mr. Lu is the editor of several accounting and finance journals and has issued various publications. He is an independent non-executive director of Bank of China Limited, China National Materials Company Limited and Sinotrans Limited and an independent supervisor of PICC Property and Casualty Company Limited, shares of all four companies being listed on the Stock Exchange.

Save for the positions mentioned above, Mr. Lu has not previously held and is not holding any other position with the Company or any of its subsidiaries, and has not held any directorship in any other listed company in the past three years. Mr. Lu does not have any relationship with any directors, senior management or any substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Lu did not have any interest or short position in shares, underlying shares or debentures of the Company or any of its associated corporations within the meaning of Part XV of the SFO.

Mr. Li Dakui

Mr. Li Dakui （李大魁先生）, aged 74, joined the Company as an independent non-executive director and a member of the Audit Committee of the Company in September 2004. He graduated from the Faculty of Pharmacy of Beijing Medical University (now known as the School of Pharmaceutical Sciences of Beijing University) in 1965, and obtained a Master Degree in Pharmaceutics from Peking Union Medical College (“PUMC”) in 1982. He used to be the chief pharmacist of PUMC Hospital (retired in 2013) and the director of Pharmacy Department of PUMC Hospital for years. Mr. Li was a vice president of the Chinese Pharmaceutical Association, the Chairman of the Committee of Hospital Pharmacy Branch of Chinese Pharmaceutical Association and the vice chairman of the Chinese Practicing Pharmacist Association. He is currently an advisory member of the Chinese Pharmaceutical Committee and a vice president of the Beijing Pharmaceutical Association.

Save for the positions mentioned above, Mr. Li has not previously held and is not holding any other position with the Company or any of its subsidiaries, and has not held any directorship in any other listed company in the past three years. Mr. Li does not have any relationship with any directors, senior management or any substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Li did not have any interest or short position in shares, underlying shares or debentures of the Company or any of its associated corporations within the meaning of Part XV of the SFO.

– 8 –

LETTER FROM THE BOARD OF DIRECTORS

Directors’ Emoluments

The amounts of emoluments received in 2017 by the Directors to be re-elected at the AGM are set out in the table below:

		Salaries,
		allowances		Employee
		and		share	Pension
		benefits in	Discretionary	option	scheme	Total
Directors	Fees	kind	bonuses	benefits	contributions	remuneration
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Mr. Tse Ping	–	10,710	26,017	–	–	36,727
Ms. Li Mingqin	–	546	400	–	–	946
Mr. Lu Zhengfei	291	–	–	–	–	–
Mr. Li Dakui	291	–	–	–	–	–

The emoluments to be received in 2018 by the above Directors will be determined by the Board based on the remuneration policy of the Company, with reference to the Directors’ qualification and experience, responsibilities undertaken, contribution to the Group, and the prevailing market level of remuneration of similar position.

Other Information

Of the above Directors to be re-elected at the AGM, the executive Directors will not be appointed for a specific term while each of the independent non-executive Directors will be appointed for a term of two years. All of the aforesaid Directors shall be subject to retirement by rotation and re-election at annual general meeting of the Company in accordance with the Articles, the laws of the Cayman Islands and the Listing Rules so far as the same may be applicable. There is no information which is discloseable or are/were the above Directors to be re-elected involved in any of the matters required to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(w) of the Listing Rules, and the Board is not aware of any other matters which need to be brought to the attention of the Shareholders.

AGM

The notice convening the AGM is set out on pages 17 to 22 of this 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 branch share registrar of the Company, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the AGM or any adjournment thereof. Completion and return of the form of proxy will not prevent you from attending and voting at the AGM or any adjourned meeting should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a

– 9 –

LETTER FROM THE BOARD OF DIRECTORS

show of hands. Therefore, all the resolutions put to the vote at the AGM will be taken by way of poll and the Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

BONUS ISSUE OF SHARES

The Board receommend a bonus issue of Shares on the basis of one Bonus Share for every two existing Shares held by the Qualifying Shareholders whose names appear on the register of members of the Company on the Record Date. Details of the Bonus Issue are set out below.

Basis of the Bonus Issue

Subject to the conditions set out under the paragraph headed “Conditions of the Bonus Issue” below, the Bonus Shares will be issued and credited as fully paid at par value on the basis of one Bonus Share for every two existing Shares held by the Qualifying Shareholders on the Record Date.

Assuming that no further Shares will be issued or repurchased on or before the Record Date, on the basis of 8,425,194,325 existing Shares in issue as at the Latest Practicable Date, it is expected that a total of 4,212,597,162 Bonus Shares would be allotted and issued under the Bonus Issue, representing 50% of the existing issued share capital of the Company as at the Latest Practicable Date. Upon completion of the Bonus Issue, there will be a total of 12,637,791,487 Shares in issue as enlarged by the Bonus Issue.

The Bonus Shares will be credited as fully paid at par by way of capitalisation of the amount equal to the total par value of the Bonus Shares standing to the credit of the share premium account of the Company.

Conditions of the Bonus Issue

The Bonus Issue is conditional upon:

• (i) the passing of an ordinary resolution by the Shareholders at the AGM for approving the Bonus Issue; and

• (ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Bonus Shares.

Overseas Shareholders

As at the Latest Practicable Date, the Company did not have any Overseas Shareholder.

In the event that there are as at the Record Date any Overseas Shareholder(s), the Company will make enquiry and, if necessary, seek legal advice(s) from overseas counsel(s) on the applicable procedural requirements for extending the Bonus Issue to the Overseas Shareholders. Upon such enquiry, if the Board is of the view that the exclusion of the Overseas Shareholders is necessary or expedient on account either of the legal restrictions

– 10 –

LETTER FROM THE BOARD OF DIRECTORS

under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, the Bonus Shares will not be issued to those Overseas Shareholders, i.e. the Non-Qualifying Shareholders. In such circumstances, arrangements will be made for the Bonus Shares, which would otherwise have been issued to the Non-Qualifying Shareholders, if any, to be sold in the market as soon as practicable after dealings in the Bonus Shares commence. Any net proceeds of sale, after deduction of the related expenses, will be distributed in Hong Kong dollar to the Non-Qualifying Shareholders, if any, prorata 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.

Any Shareholder with a registered address outside Hong Kong or otherwise residing outside Hong Kong should consult their professional advisers as to whether they are permitted to receive the Bonus Shares under the Bonus Issue and the taxation consequences of their decision. It is the responsibility of the Shareholders who wish to receive the Bonus Shares under the Bonus Issue to comply with the laws of the relevant jurisdiction(s).

Status of the Bonus Shares and fractional entitlements

The Bonus Shares, upon issuance, will rank pari passu with the then existing Shares in all respects, including the entitlements of receiving dividends and other distributions the record date for which falls on or after the date of allotment and issue of the Bonus Shares.

There will not be any fractional entitlements to the Bonus Shares. Bonus Shares representing fractional entitlement will be aggregated and issued to a nominee to be nominated by the Board. Such Bonus Shares (if any) will be sold and the net proceeds, after deducting the related expenses therefrom, will be retained by the Company for its own benefits.

Listing

Application has been made to the Stock Exchange for the listing of, and permission to deal in, the Bonus Shares. No part of the securities of the Company is listed or dealt in, nor is listing or permission to deal in the securities of the Company being or proposed to be sought, on any other stock exchange.

Subject to fulfillment of all conditions of the Bonus Issue have been fulfilled, dealings in the Bonus Shares on the Stock Exchange are expected to commence at 9:00 a.m., Wednesday, 20 June 2018.

Dealings

Subject to the satisfaction of the conditions as set out in the paragraph headed “Conditions of the Bonus Issue” above, the Bonus Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS. All necessary

– 11 –

LETTER FROM THE BOARD OF DIRECTORS

arrangements will be made for the Bonus Shares to be admitted into CCASS. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Certificates for the Bonus Shares

It is expected that certificates for the Bonus Shares will be posted on Tuesday, 19 June 2018, after all the conditions having been fulfilled at the risk of the Shareholders entitled thereto to their respective addresses shown on the register of members of the Company on the Record Date.

Tax

Dealings in the Bonus Shares will be subject to the payment of stamp duty, the Stock Exchange trading fee, transaction levy, or any other applicable fees and charges in Hong Kong. Qualifying Shareholders are recommended to consult their professional advisers if they are in any doubt as to the taxation implications of holding, disposing of or dealing in the Bonus Shares. None of the Company, its Directors or any other parties involved in the Bonus Issue accepts responsibility for any tax implication or liabilities of the Qualifying Shareholders.

Share Options

The Company has adopted a share option scheme on 28 May 2013. As at the Latest Practicable Date, no share option had been granted under the scheme.

Reasons for the Proposed Bonus Issue

The Board proposed the Bonus Issue in recognition of the Shareholders’ continuous support to the Company. Despite the share price per Share on an ex-entitlement basis would be reduced by the same proportion and the Bonus Issue is not expected to increase their proportionate interests in the Company, the Bonus Issue will substantially increase the number of Shares to be held by the Shareholders which will enable them to enjoy more flexibility in managing their own investment portfolios such as giving them an opportunity to dispose of part of their Shares and realise a cash return.

The Directors, noting that the Shareholders’ proportionate interests in the Company will not be increased by the Bonus Issue, are of the view that the Bonus Issue will allow the Shareholders to participate in the business growth of the Company and be a return to the long-term support of the Shareholders.

RECOMMENDATION

The Directors believe that the proposals for the grant of the Share Issue Mandate, the Share Buy-back Mandate, the re-election of Directors and the Bonus Issue are 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 AGM.

– 12 –

LETTER FROM THE BOARD OF DIRECTORS

CLOSURE OF REGISTER OF MEMBERS OF THE COMPANY

The register of members of the Company will be closed from Thursday, 24 May 2018 to Tuesday, 29 May 2018 (both days inclusive), during which no transfer of Shares will be registered. In order to attend and vote at the AGM (or any adjournment thereof), all transfers of Shares accompanied by the relevant share certificates must be lodged with Tricor Tengis Limited, the Hong Kong branch share registrar of the Company, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Wednesday, 23 May 2018.

The register of members of the Company will be closed from Wednesday, 6 June 2018 to Monday, 11 June 2018 (both days inclusive), both days inclusive, during which period no transfer of Shares will be registered. In order to qualify for the Bonus Issue, all transfers of Shares accompanied by the relevant share certificates must be lodged with Tricor Tengis Limited, the Hong Kong branch share registrar of the Company, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Tuesday, 5 June 2018.

RESPONSIBILITY STATEMENT

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

Yours faithfully, By Order of the Board Sino Biopharmaceutical Limited Tse, Theresa Y Y Chairlady

– 13 –

EXPLANATORY STATEMENT

APPENDIX

This appendix serves as an explanatory statement as required by the Listing Rules to provide the requisite information to you for your consideration of the Share Buy-back Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the number of issued shares of the Company was 8,425,194,325 Shares.

Subject to the passing of the relevant ordinary resolution at the AGM and assuming there is no change in the number of issued shares of the Company from the Latest Practicable Date to the date of AGM, the Directors will be authorised to buy back up to 842,519,432 Shares pursuant to the Share Buy-back Mandate.

2. REASONS FOR BUY BACK

The Directors believe that it is in the best interests of the Company and its Shareholders to have a general authority from the Shareholders to enable the Directors to buy back the shares of the Company in the market. Such buy-backs may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or earnings per share and will only be made when the Directors believe that such buy-backs will benefit the Company and the Shareholders as a whole.

3. FUNDING OF BUY-BACKS

In buying back the shares of the Company, the Company may only apply funds legally available for such purpose in accordance with its memorandum and articles of association and all applicable laws. It is envisaged that the funds required for any buy-back would be derived from the distributable profits of the Company.

The Share Buy-back Mandate, if exercised in full, may have a material adverse effect on the working capital or gearing position of the Company as compared with the position disclosed in the Company’s most recent published audited accounts. The Directors, however, do not propose to exercise the Share Buy-back Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital or the gearing level of the Company which in the opinion of the Directors is from time to time appropriate for the Company.

4. DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors, to the best of their knowledge after having made all reasonable enquiries, nor any of their associates (as defined in the Listing Rules) currently intend to sell any Shares to the Company in the event that the Share Buy-back Mandate is granted by the Shareholders at the AGM.

– 14 –

EXPLANATORY STATEMENT

APPENDIX

No core connected person, as defined in the Listing Rules, has notified the Company that he/she has a present intention to sell any Shares held by him/her to the Company, or that he/she has undertaken not to sell any Shares held by him/her to the Company, in the event that the Share Buy-back Mandate is granted by the Shareholders at the AGM.

5. UNDERTAKING

The Directors have undertaken to the Stock Exchange that they will exercise the Share Buy-back Mandate in accordance with the Listing Rules, the laws of the Cayman Islands and the Articles so far as the same may be applicable.

6. EFFECT OF THE TAKEOVERS CODE

If, on the Company’s exercise of its power to buy back the shares of the Company pursuant to the Share Buy-back Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of Rule 32 of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert (as defined in the Takeovers Code), depending on the level of such increase, could obtain or consolidate control of the Company and may become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, to the best knowledge of the Company, each of Mr. Tse Ping (through his own interests and interests in Validated Profits Limited), Ms. Cheng Cheung Ling (through her own interests and interests in Chia Tai Bainian Holdings Limited and Remarkable Industries Limited) and Miss Tse, Theresa Y Y (through her controlling interests in France Investment (China 1) Group Limited) was interested in 1,222,526,722 Shares, 1,863,371,000 Shares and 1,013,002,116 Shares, respectively, representing 14.51%, 22.12% and 12.02% of the number of issued shares of the Company, respectively. In the event that the Directors exercise in full the power to buy back Shares pursuant to the Share Buy-back Mandate, the shareholding interests of Mr. Tse Ping, Ms. Cheng Cheung Ling and Miss Tse, Theresa Y Y in the Company would, respectively, be increased to 16.12%, 24.57% and 13.36% of the number of issued shares of the Company. The Directors do not intend to exercise the Share Buy-back Mandate to such an extent as would result in a Shareholder or a group of Shareholders acting in concert becoming obliged to make a mandatory general offer under Rule 26 of the Takeovers Code and, accordingly, it is not anticipated that purchases of Shares under the Buy-back Mandate will give rise to any consequences under the Takeovers Code.

The Directors are not aware of any consequences such that the public float of the issued shares of the Company will be reduced to less than 25% as a result of any purchases of Shares to be made under the Share Buy-back Mandate.

– 15 –

EXPLANATORY STATEMENT

APPENDIX

7. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange as quoted in the Stock Exchange’s daily quotations sheets in each of the twelve months preceding the Latest Practicable Date are as follows:–

	Shares
	Highest	Lowest
	HK$	HK$
2017
April	6.70	6.07
May	7.19	6.17
June	7.42	6.74
July	7.12	6.66
August	7.03	6.49
September	8.46	6.86
October	9.24	8.20
November	11.86	9.22
December	13.96	10.06
2018
January	15.92	13.00
February	15.14	12.54
March	16.94	13.96
April (up to and including the Latest Practicable Date)	17.46	14.92

8. SHARE BUY-BACK MADE BY THE COMPANY

The Company has not repurchased any of its Shares whether on the Stock Exchange or otherwise in the six months preceding the Latest Practicable Date.

– 16 –

NOTICE OF ANNUAL GENERAL MEETING

==> picture [217 x 124] intentionally omitted <==

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

NOTICE IS HEREBY GIVEN that the annual general meeting of Sino Biopharmaceutical Limited (the “Company”) will be held at 10:00 a.m. on Tuesday, 29 May 2018 at 7th Floor, Dynasty I, The Dynasty Club Limited, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong for the following purposes:

1. To receive and adopt the audited consolidated financial statements of the Company, the report of directors of the Company (“Directors”) and the report of independent auditors of the Company (“Auditors”) for the year ended 31 December 2017;

2. To approve the payment of a final dividend for the year ended 31 December 2017;

3. To re-elect Mr. Tse Ping as an executive director of the Company;

4. To re-elect Ms. Li Mingqin as an executive director of the Company;

5. To re-elect Mr. Lu Zhengfei as an independent non-executive director of the Company;

6. To re-elect Mr. Li Dakui as an independent non-executive director of the Company;

7. To authorise the board of Directors to fix the remuneration of the Directors;

8. To re-appoint Ernst & Young as Auditors for the year ending 31 December 2018 and to authorise the board of Directors to fix their remuneration; and

– 17 –

NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and, if thought fit, pass with or without amendments the following resolutions as Ordinary Resolutions:

ORDINARY RESOLUTIONS

(A) “ THAT :

• (1) subject to paragraph (3) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company (“Shares”) and to make or grant offers, agreements, options and other securities, including warrants to subscribe for Shares, which would or might require the exercise of such powers, be and is hereby generally and unconditionally approved;

• (2) the approval in paragraph (1) above shall be in addition to any other authorization given to the Directors and shall authorize the Directors during the Relevant Period to make or grant offers, agreements, options and other securities, including warrants to subscribe for Shares, which would or might require the Company to allot, issue or deal with additional Shares at any time during or after the end of the Relevant Period;

• (3) the number of Shares to be issued by the Company which may be allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise), issued or otherwise dealt with by the Directors pursuant to the approval in paragraph (1) above, otherwise than pursuant to a Rights Issue (as hereinafter defined) or on the exercise of the subscription or conversion rights attaching to any securities which may be issued by the Company from time to time and which have previously been approved by shareholders of the Company or on the exercise of the options granted under the share option scheme of the Company or in lieu of the whole or part of a dividend on Shares, shall not exceed 20% of the total number of issued Shares as at the date of the passing of this resolution and the said approval shall be limited accordingly; and

• (4) for the purpose of this resolution:

“Relevant Period” means the period from the time of the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable law or the articles of association of the Company to be held; and

– 18 –

NOTICE OF ANNUAL GENERAL MEETING

• (iii) the time of the passing of an ordinary resolution of the Company in general meeting revoking or varying the authority set out in this resolution, and

“Rights Issue” means an offer of Shares open for a period fixed by the Directors to holders of Shares whose names on the register of members of the Company on a fixed record date in proportion to their then holdings of such Shares (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or requirements of any recognized regulatory body or any stock exchange in, any territory applicable to the Company).”

(B) “ THAT :

• (1) subject to paragraph (2) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to buy back shares in the capital of the Company (“Shares”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the Shares may be listed and which is recognized by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and/or the requirements of the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (2) the total number of Shares authorized to be bought back by the Company pursuant to the approval in paragraph (1) above during the Relevant Period shall not exceed 10% of the total number of Shares in issue as at the date of the passing of this resolution and the said approval shall be limited accordingly; and

• (3) for the purpose of this resolution:

“Relevant Period” means the period from the time of the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable laws or the articles of association of the Company to be held; and

• (iii) the time of the passing of an ordinary resolution of the Company in general meeting revoking or varying the authority set out in this resolution.”

– 19 –

NOTICE OF ANNUAL GENERAL MEETING

• (C) “ THAT , conditional upon the resolutions set out as Resolution (A) and Resolution (B) in paragraph 9 of the notice convening this meeting being duly passed, the general mandate granted to the Directors and for the time being in force to exercise the powers of the Company to allot, issue and deal with additional shares in the capital of the Company (“Shares”) pursuant to the resolution set out as Resolution (A) in paragraph 9 of the notice convening this meeting be and is hereby extended by the addition to the number of Shares which may be so allotted, issued and dealt with of a number representing the total number of issued Shares bought back by the Company under the authority granted pursuant to the resolution set out as Resolution (B) in paragraph 9 of the notice convening this meeting, provided that such extended amount shall not exceed 10 per cent. of the total number of Shares in issue at the date of passing of the said resolution.”

• (D) “ THAT subject to and conditional upon the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of and permission to deal in the Bonus Shares to effect the Bonus Issue (as defined below):

• (1) upon the recommendation of the Directors, such amount standing to the credit of the share premium account of the Company which is equivalent to the aggregate nominal amount of the Bonus Shares (as defined below) to be issued by the Company be capitalised and the Directors be and are hereby authorized to apply such amount in paying up in full at par such number of new shares of HK$0.025 each in the capital of the Company (the “Bonus Share(s)”) on the basis of one Bonus Share for every two existing Shares in issue on the Record Date (as defined below), and the Directors be authorised to allot, issue and distribute the Bonus Shares, which shall be credited as fully paid at par, to the members of the Company whose names appear on the register of members of the Company as at the close of business on Monday, 11 June 2018 (the “Record Date”) or such other date as the Directors may determine as the record date for determination of the entitlements of the members to the Bonus Issue (as defined below), other than those members (the “Non-Qualifying Shareholders”) whose addresses as shown on the register of members of the Company at the close of business on the Record Date are outside Hong Kong and in respect of whom the Directors consider the exclusion from the Bonus Issue (as defined below) to be necessary or expedient on account either of the legal restrictions under the laws of the relevant place(s) or the requirements of a regulatory body or stock exchange in that (those) place(s) (the “Bonus Issue”);

• (2) the Bonus Shares to be allotted, issued and distributed pursuant to this resolution shall, subject to the memorandum and articles of association of the Company, rank pari passu in all respects with the Shares in issue as at the Record Date;

• (3) the Directors be and are hereby authorised to arrange for the Bonus Shares which would otherwise have been issued to the Non-Qualifying Shareholders, if any, to be sold in the market as soon as practicable after dealing in the Bonus Shares commences, and distribute the net proceeds of

– 20 –

NOTICE OF ANNUAL GENERAL MEETING

sale, after deduction of expenses, in Hong Kong dollars to the Non-Qualifying Shareholders, if any, pro rata to their respective shareholdings and to post to them the remittances thereof by ordinary mail at their own risk, unless the amount falling to be distributed to any such persons is less than HK$100, in which case, the Directors be and are hereby authorized to retain such amount for the benefit of the Company; and

• (4) the Directors be and are hereby authorised, at their absolute discretion, to do all acts and things as may be necessary and expedient in connection with the allotment and issue of the Bonus Shares, including, but not limited to, determining the amount to be capitalised out of the share premium account of the Company and the number of Bonus Shares to be issued, allotted and distributed in the manner referred to in this resolution.”

By Order of the Board Sino Biopharmaceutical Limited Chan Oi Nin Derek Company Secretary

Hong Kong, 25 April 2018

As at the date of this notice, the board of Directors comprises seven executive Directors, namely Miss Tse, Theresa Y Y, Mr. Tse Ping, Ms. Cheng Cheung Ling, Mr. Tse Hsin, Mr. Wang Shanchun, Mr. Tian Zhoushan and Ms. Li Mingqin and four independent non-executive Directors, namely Mr. Lu Zhengfei, Mr. Li Dakui, Ms. Lu Hong and Mr. Zhang Lu Fu.

– 21 –

NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Any member entitled to attend and vote at the above meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A proxy needs not be a member of the Company.

2. To be valid, a form of proxy with the power of attorney or other authority, if any, under which it is signed, or a certified copy of that power or authority must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting.

3. The register of members of the Company will be closed for the following periods:

4. (a) For the purpose of determining shareholders who are entitled to attend and vote at the above meeting, the register of members of the Company will be closed from Thursday, 24 May 2018 to Tuesday, 29 May 2018 (both dates inclusive) during which period no transfer of shares will be registered. In order to qualify for the attendance and voting at the above meeting, all properly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Wednesday, 23 May 2018 for registration.

5. (b) For the purpose of determining shareholders who qualify for the final dividend and the Bonus Issue as mentioned in Resolution 2 and Resolution 9(D) above, respectively, the register of members of the Company will be closed from Wednesday, 6 June 2018 to Monday, 11 June 2018 (both days inclusive) during which period no transfer of shares will be registered. In order to qualify for the final dividend and the Bonus Issue, all properly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Tuesday, 5 June 2018 for registration.

– 22 –