Sinopharm Tech Holdings Limited — Proxy Solicitation & Information Statement 2021

Mar 4, 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Sinopharm Tech Holdings Limited (the ‘‘Company’’), 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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Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

1) CONNECTED TRANSACTION IN RELATION TO PROPOSED AMENDMENTS TO THE TERMS OF THE CONVERTIBLE BONDS;

2) PROPOSED GRANT OF SPECIFIC MANDATE TO ISSUE CONVERSION SHARES;

AND

3) NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

Capitalized terms used in this cover page shall have the same meanings as those defined in this circular.

A letter from the Board is set out on pages 4 to 13 of this circular. A letter from the Independent Board Committee is set out on pages 14 to 15 of this circular. A letter from Gram Capital, being the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, is set out on pages 16 to 25 of this circular.

A notice convening the EGM of the Company to be held at Units 01–03, 25/F, Corporation Park, 11 On Lai Street, Shatin, New Territories, Hong Kong on Monday, 22 March 2021 at 11: 00 a.m. is set out on pages 31 to 33 of this circular. A form of proxy for use at the EGM is enclosed with this circular.

Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same at the Hong Kong branch share registrar and transfer office of the Company, Tricor Standard Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less 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 in person at the EGM or any adjournment thereof should you so wish and in such event, the proxy shall be deemed to be revoked.

This circular will remain on the ‘‘Latest Listed Company Information’’ page of the GEM website at http://www.hkgem.com for a minimum period of 7 days from the date of its posting and on the website of the Company at http://www.sinopharmtech.com.hk.

5 March 2021

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

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CONTENTS

		Page
Characteristics of GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		i
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Letter from	Gram Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Appendix	— General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		31

– ii –

DEFINITIONS

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

• ‘‘associate(s)’’ has the meaning ascribed to it under the GEM Listing Rules

• ‘‘Best Frontier’’ Best Frontier Investments Limited, a limited company incorporated in the British Virgin Islands

• ‘‘Board’’ the board of Directors

• ‘‘Bondholder(s)’’ holder(s) of the Convertible Bonds from time to time

• ‘‘Business Day’’ any day (excluding a Saturday, a Sunday and any public holiday and any day on which a tropical cyclone warning no.8 or above or a ‘‘black’’ rainstorm warning signal is hoisted or remains hoisted in Hong Kong at any time between 9: 00 a.m. and 12: 00 noon and is not lowered or discontinued at or before 12: 00 noon) on which licensed banks are generally open for business in Hong Kong throughout their normal business hours

• ‘‘Company’’ Sinopharm Tech Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on the GEM

• ‘‘connected person(s)’’ has the meaning ascribed to it under the GEM Listing Rules

• ‘‘Conversion Period’’ the period from 18 January 2021 to 17 January 2022

• ‘‘Conversion Price’’ HK$0.221 per Conversion Share (subject to adjustment)

• ‘‘Conversion Share(s)’’ the maximum number of 405,542,986 new Shares which may be allotted and issued upon conversion of the Convertible Bonds in full

• ‘‘Convertible Bonds’’ the 8% coupon convertible bonds in aggregate amount of HK$89,625,000 issued by the Company to the Subscriber pursuant to the Subscription Agreement (as amended by the First Amendment Agreement, the Second Amendment Agreement, the Third Amendment Agreement and the Fourth Amendment Agreement)

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘EGM’’

• the extraordinary general meeting of the Company to be convened and held to consider, and if thought fit, to approve the Fifth Amendment Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate to issue the Conversion Shares

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DEFINITIONS

• ‘‘Fifth Amendment Agreement’’

• the fifth amendment agreement dated 19 January 2021 entered into between the Company and the Bondholder in relation to the Proposed Amendments

• ‘‘First Amendment the amendment agreement dated 18 January 2017 entered into Agreement’’ between the Company and the Bondholder

• ‘‘Fourth Amendment the fourth amendment agreement dated 7 February 2020 entered Agreement’’ into between the Company and the Bondholder

• ‘‘GEM’’

• GEM of the Stock Exchange

• ‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Board Committee’’

• an independent committee of the Board comprising all the independent non-executive Directors, formed for the purpose of advising the Independent Shareholders as to the terms of the Fifth Amendment Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate to issue the Conversion Shares

• ‘‘Independent Financial Adviser’’ or ‘‘Gram Capital’’

• Gram Capital Limited, a licensed corporation to carry out Type 6 (advising on corporate finance) regulated activity under the SFO, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Fifth Amendment Agreement and the transactions contemplated thereunder

• ‘‘Independent Shareholder(s)’’

• Shareholder(s) other than those who have a material interest in the relevant resolution(s) to be proposed at the EGM

• ‘‘Integrated Asset Management’’

• Integrated Asset Management (Asia) Limited, a limited company incorporated in the British Virgin Islands

• ‘‘Latest Practicable Date’’

• 2 March 2021, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular

• ‘‘Maturity Date’’

on 17 January 2021

• ‘‘PRC’’

The People’s Republic of China excluding Hong Kong, Macau Special Administrative Region of the PRC and Taiwan for the purpose of this circular

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DEFINITIONS

• ‘‘Proposed the proposed amendments to the Convertible Bonds pursuant to Amendments’’ the terms of the Fifth Amendments Agreement

• ‘‘Second Amendment the second amendment agreement dated 18 January 2018 entered Agreement’’ into between the Company and the Bondholder

• ‘‘SFO’’ Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong), as amended, supplemented and modified from time to time

• ‘‘Share(s)’’ ordinary share(s) of HK$0.0125 each in the share capital of the Company

• ‘‘Shareholder(s)’’

• holder(s) of the Share(s)

• ‘‘Share Subdivision’’

• the subdivision of every issued and unissued share in the capital of the Company from HK$0.05 each to HK$0.0125 each, which took effect on 17 December 2014

• ‘‘Specific Mandate’’

• the specific mandate to be sought from the Independent Shareholders at the EGM for the allotment and issuance of the Conversion Shares to the Bondholder upon its exercise of the conversion rights

• ‘‘Stock Exchange’’ the Stock Exchange of Hong Kong Limited

• ‘‘Subscriber’’ Integrated Asset Management

• ‘‘Subscription the conditional subscription agreement dated 13 January 2014 Agreement’’ and entered into between the Company and the Subscriber in relation to the subscription of the Convertible Bonds

• ‘‘substantial has the meaning ascribed thereto under the GEM Listing Rules Shareholder(s)’’

• ‘‘Third Amendment the third amendment agreement dated 17 January 2019 entered Agreement’’ into between the Company and the Bondholder

• ‘‘United States’’ the United States of America

• ‘‘US$’’ United States dollars, the lawful currency of the United States ‘‘%’’ per cent.

If there is any inconsistency in this circular between the Chinese and English versions, then English version shall prevail.

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LETTER FROM THE BOARD

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Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

Executive Directors: Mr. CHAN Ting (Chairperson and Chief Executive Officer)

Non-executive Directors: Madam CHEUNG Kwai Lan (Honorary Chairperson) Mr. CHAN Tung Mei Dr. CHENG Yanjie

Independent Non-executive Directors: Mr. LAU Fai Lawrence Dr. LIU Ta-pei Mr. CHAU Wai Wah Fred

Registered office: Second Floor, Century Yard Cricket Square, P.O. Box 902 Grand Cayman KY1-1103 Cayman Islands

Head office and principal place of business in Hong Kong: Units 01–03, 25/F. Corporation Park 11 On Lai Street, Shatin New Territories, Hong Kong

5 March 2021

To the Shareholders

Dear Sir/Madam,

1) CONNECTED TRANSACTION IN RELATION TO PROPOSED AMENDMENTS TO THE TERMS OF THE CONVERTIBLE BONDS;

2) PROPOSED GRANT OF SPECIFIC MANDATE TO ISSUE CONVERSION SHARES; AND

3) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 19 January 2021, in relation to, among others, the Fifth Amendment Agreement to the terms of the Convertible Bonds, and the transactions contemplated thereunder, which constitutes a connected transaction of the Company under Chapter 20 of the GEM Listing Rules. The Board proposes to seek the approval of the Independent Shareholders for the Fifth Amendment

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LETTER FROM THE BOARD

Agreement and the transactions contemplated thereunder, including the Proposed Amendments and the Specific Mandate involving the issuance of Conversion Shares falling to be issued upon the exercise of the conversion rights attaching to the Convertible Bonds.

Reference is made to the announcements of the Company dated 13 January 2014, 17 January 2014, 18 January 2017, 7 August 2017, 18 January 2018, 17 January 2019, 10 May 2019, 7 February 2020, 19 January 2021 and the circulars of the Company dated 27 November 2014, 10 March 2017, 29 March 2018, 1 March 2019 and 10 March 2020.

On 13 January 2014, the Company entered into the Subscription Agreement with Integrated Asset Management (as the Subscriber and the Bondholder), pursuant to which the Company conditionally agreed to issue the Convertible Bonds due 2017, in the aggregate principal amount of HK$89,625,000 at the interest rate of 2% per annum, to Integrated Asset Management. On 17 January 2014, the Company completed the issue of the Convertible Bonds to Integrated Asset Management pursuant to the Subscription Agreement.

On 18 January 2017, 18 January 2018, 17 January 2019 and 7 February 2020, the Company entered into the First Amendment Agreement, the Second Amendment Agreement, the Third Amendment Agreement and the Fourth Amendment Agreement with Integrated Asset Management respectively to amend certain terms and conditions of the Convertible Bonds. On 10 May 2019, as a result of the allotment and issue of 650,000,000 consideration shares to Sinopharm Traditional Chinese Medicine Overseas Holdings Limited, the conversion price of the Convertible Bonds has changed to HK$0.34 per conversion share, and the number of conversion shares which may fall to be allotted and issued upon exercise of the conversion rights attached to the Convertible Bonds in full shall be 263,602,941 Shares.

As at the Latest Practicable Date, the Bondholder is interested in 461,733,000 Shares, representing approximately 10.76% of the issued Share capital of the Company, being a substantial Shareholder and a connected person of the Company under Rule 20.07(1) of the GEM Listing Rules. Pursuant to the Fourth Amendment Agreement, the maximum number of conversion shares which may be allotted and issued to the Bondholder under the Convertible Bonds (if all conversion rights attaching to the Convertible Bonds in the principal amount of HK$89,625,000 are exercised by the Bondholder in full) shall be 263,602,941 conversion shares. If the Bondholder shall exercise its conversion rights in full, it will be interested in an aggregate number of 725,335,941 Shares, representing approximately 16.91% of the existing issued Share capital of the Company and approximately 15.93% of the enlarged issued Share capital of the Company.

As at the Latest Practicable Date, the issued Share capital of the Company was 4,289,724,633 Shares. None of the Convertible Bonds have been redeemed nor converted.

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LETTER FROM THE BOARD

As disclosed in the announcement of the Company dated 18 January 2021, the Convertible Bonds was due on 17 January 2021 pursuant to the Fourth Amendment Agreement. As disclosed in the announcement of the Company dated 19 January 2021, the Company and Integrated Asset Management entered into the Fifth Amendment Agreement on 19 January 2021 to amend the terms and conditions of the Convertible Bonds.

The purpose of this circular is to provide you with, among others things:

1. details of the Fifth Amendment Agreement and the transactions contemplated thereunder;

2. the recommendations of the Independent Board Committee in relation to the Fifth Amendment Agreement and the transactions contemplated thereunder;

3. the recommendations of Gram Capital in relation to the Fifth Amendment Agreement and the transactions contemplated thereunder; and

4. the notice of the EGM.

THE FIFTH AMENDMENT AGREEMENT

On 19 January 2021 (after trading hours), the Company entered into the Fifth Amendment Agreement with Integrated Asset Management as the Bondholder, pursuant to which the Company and the Bondholder agreed to amend the terms and conditions of the Convertible Bonds as follows:

1. The conversion price of the Convertible Bonds shall be amended from HK$0.34 per Share to HK$0.221 per Share, which can be converted into for the maximum number of 405,542,986 Shares.

2. The Maturity Date of the Convertible Bonds issued under the Subscription Agreement shall be extended for one year from 17 January 2021 to 17 January 2022.

3. Clause 5 of Schedule 2 set in the Subscription Agreement regarding the bearing interest rate of the Convertible Bonds shall be increased to 10% per annum and interest shall be paid annually from the date of the Fifth Amendment Agreement.

Save and except for the aforesaid, there are no other amendments to the terms of the Convertible Bonds.

Pursuant to the Fifth Amendment Agreement, the Proposed Amendments shall take effect upon the fulfilment of the following conditions precedent:

• i) all necessary consents and approvals required to be obtained on part of the Company in respect of the Proposed Amendments having been obtained;

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LETTER FROM THE BOARD

• ii) passing of all necessary resolutions by the Independent Shareholders at the EGM to approve the Fifth Amendment Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate; and

• iii) approval from the Stock Exchange having been granted for the listing of, and permission to deal in, the Convertible Shares on the Stock Exchange during the Conversion Period.

None of the above conditions could be waived by the parties to the Fifth Amendment Agreement. As at the Latest Practicable Date, the condition i) above has been satisfied. Saved as disclosed, none of the above conditions have been fulfilled.

Conversion Price per Conversion Share

Under the Fourth Amendment Agreement, the conversion price was HK$0.34 per Share, at which the maximum number of 263,602,941 Shares could be allotted and issue upon conversion of the Convertible Bonds in full.

Under the Fifth Amendment Agreement, the conversion price shall be adjusted from HK$0.34 per Share to HK$0.221 per Share, which can be converted into for the maximum number of 405,542,986 Conversion Shares.

The Conversion Price was determined after arm’s length negotiation between the Company and Integrated Asset Management with reference to the recent performance of the Company’s Share price. The Conversion Price of HK$0.221 per Conversion Share represents:

• (i) a discount of approximately 19.64% to the closing price per Share of HK$0.275 as quoted on the Stock Exchange on 19 January 2021 (the date of the Fifth Amendment Agreement);

• (ii) a discount of approximately 15.65% to the average closing price per Share of approximately HK$0.262 as quoted on the Stock Exchange for the last five consecutive trading days up to and including 19 January 2021 (the date of the Fifth Amendment Agreement);

• (iii) a premium of approximately 3.27% to the average closing price per Share of approximately HK$0.214 as quoted on the Stock Exchange for the last twenty consecutive trading days up to and including 19 January 2021 (the date of the Fifth Amendment Agreement); and

• (iv) a discount of approximately 25.08% to the closing price per Share of HK$0.295 as quoted on the Stock Exchange on the Latest Practicable Date.

The basis for the adjusted Conversion Price was determined after arm’s length negotiation between the Company and the Bondholder. Although the Conversion Price was determined with reference more (only a little premium of approximately 3.27%) to the average closing price per Share as quoted on the Stock Exchange for the last twenty

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LETTER FROM THE BOARD

consecutive trading days up to and including the date of the Fifth Amendment Agreement, the Conversion Price represents (i) a large discount of approximately 19.64% to the closing price per Share of HK$0.275 as quoted on the Stock Exchange on the date of the Fifth Amendment Agreement; and (ii) a large discount of approximately 15.65% to the average closing price per Share of approximately HK$0.262 as quoted on the Stock Exchange for the last five consecutive trading days up to and including the date of the Fifth Amendment Agreement. The Board considers that there is still an incentive for the Bondholder to convert the Convertible Bonds.

The extension of the Maturity Date of the Convertible Bonds at the adjusted Conversion Price of $0.221 will be beneficial to the Company by mitigating the pressure on its cashflows. Taking into account that (i) the adjusted Conversion Price of $0.221 for the extension of the Maturity Date of the Convertible Bonds which will be beneficial to the Company by mitigating the pressure on its cashflows; and (ii) the Group’s difficulties in obtaining bank borrowings, the Board considers that the conversion price, which will be adjusted to HK$0.221 given that the Convertible Bonds continues to be interest bearing under the Fifth Amendment Agreement, to be justifiable and is in the interests of the Independent Shareholders.

Specific Mandate for the Issuance of the Conversion Shares

The total Conversion Shares of 405,542,986 will be allotted and issued by the Company upon exercise of the conversion rights under the Convertible Bonds in full at HK$0.221 per Share. In view that the Proposed Amendments are effectively a new arrangement that involves issue of new Shares, issuance of all of the Conversion Shares shall be subject to the Independent Shareholders’ approval.

Listing application

Application will be made to the Listing Committee of the Stock Exchange for the granting of the listing of, and permission of deal in, the Conversion Shares falling to be allotted and issued under the terms and conditions of the Convertible Bonds.

Ranking of Conversion Shares

The Conversion Shares, when fully paid, issued and allotted, will rank pari passu in all respects with all Shares in issue as at the date of issuance of the Conversion Shares.

REASONS FOR AND BENEFITS OF THE PROPOSED AMENDMENTS

The principal activities of the Group are provision of (i) lottery-related services, (ii) internet plus services (solution and supply chain), (iii) manufacturing and distribution of personal protective equipment and (iv) other services.

The Bondholder is principally engaged in investment holding, which is wholly owned by Mr. YAM Tak Cheung.

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LETTER FROM THE BOARD

The Proposed Amendments were arrived at after arm’s length negotiation between the Company and the Bondholder. The Board considers that the extended time for the repayment to the Bondholder will be beneficial to the Company and its operations by mitigating the pressure on its cashflows. As at 30 June 2020 and the Latest Practicable Date, the Group recorded bank balances and cash of approximately HK$6.75 million and HK$0.4 million respectively. In view of the loss making position of the Group for the year ended 30 June 2020 and lack of available assets collateral, the Board considers that it is difficult for the Group to obtain bank borrowings at favourable terms. Per the Group’s audited financial statements as at 30 June 2020, the Company only had property, plant and equipment of approximately HK$16.4 million which means the Company did not have available assets to be pledged as collateral for obtaining bank borrowings. Therefore, the Board considers that it is difficult for the Group to obtain bank borrowings based on the above assessments.

The basis of the increase in interest rate was determined after arm’s length negotiation between the Company and the Bondholder. The adjusted interest rate of 10% is still lower than the Group’s average borrowing costs of 18% per annum. The source of the Group’s borrowing is only from the promissory note issued on 10 October 2019 by a wholly-owned subsidiary of the Company with the principal amount of US$2,000,000, which was payable on or before 11 October 2020 and extended to March 2021 to be payable with interest increased from 12% per annum to 18% per annum. The Board considers that the adjusted interest rate is justifiable.

Furthermore, with reference to the maximum closing price of HK$0.275 for the last 126 consecutive trading days up to and including the date of the Fifth Amendment Agreement, there was no incentive for the Bondholder to convert the Convertible Bonds in the last half year as the maximum closing price is still lower than the conversion price of HK$0.34. As requested by the Bondholder, the extension in time should make an adjustment on the conversion price which makes it closer to the prevailing market price, it will incentivize the Bondholder to convert all or part of the Convertible Bonds not previously converted. It will be beneficial to the Company by mitigating the pressure on its cashflows.

The shareholding interests of public Shareholders of approximately 59.02% of the total issued share capital of the Company as at the Latest Practicable Date will be diluted by approximately 5.10% immediately after allotment and issuance of all the Conversion Shares upon exercise of the conversion rights in full under the Convertible Bonds at the Conversion Price of HK$0.221. The Board is of the view that the dilution effect of the Proposed Amendments is justifiable.

The Company will seek for any possibilities to raise fund through the debt or equity financing continuously for the repayment of the Convertible Bonds. Also, the Company will discuss with the Bondholder to consider any possibilities to convert all or part of the Convertible Bonds.

Based on the above, the Board is of the view that the terms and conditions of the Convertible Bonds (as amended by the Fifth Amendment Agreement) are fair and reasonable and are in the interests of the Company and its Shareholders as a whole.

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LETTER FROM THE BOARD

FUND RAISING ACTIVITY IN THE PAST TWELVE-MONTH PERIOD

Save for the fund raising activity mentioned below, the Board confirms that there has not been any fund raising exercise made by the Company in the twelve months immediately preceding the date of the Fifth Amendment Agreement.

Actual use of proceeds as at the Date of Intended use of Latest Practicable announcement Event Net proceeds proceeds Date 03/01/2020 Issue of 200,000,000 Approximately General working Utilized as intended 02/03/2020 units of unlisted HK$8.0 million on capital, repayment warrants under completion of the of debts and future specific mandate at issue of warrants on investment of the the issue price of 2 March 2020, and Group HK$0.04 per approximately warrant and exercise HK$70.0 million price of HK$0.35 upon exercise of the per warrant share warrants. As at the Latest Practicable Date, the warrants have not been exercised

CHANGES IN SHAREHOLDING STRUCTURE

The shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) for illustration purpose only, immediately after the allotment and issuance of all the Conversion Shares upon exercise of the conversion rights under the Convertible Bonds in full at HK$0.221 per Share, assuming there is no change in the number of issued Shares from the Latest Practicable Date up to the date of allotment and issue of the Conversion Shares is as follows:

Shareholders Directors Madam Cheung Kwai Lan Mr. Chan Tung Mei Dr. Cheng Yanji Mr. Chau Wai Wah Fred Sub-total Sinopharm Traditional Chinese Medicine Overseas Holdings Limited Best Frontier Investments Limited (Note 1) Integrated Asset Management (Asia) Limited (‘‘Integrated Asset Management’’) and its concert parties (Note 2) Public Shareholders Total	As at the Latest Practicable Date Number of Shares Approximate % 4,656,000 0.11 3,020,000 0.07 1,965,000 0.05 3,800,000 0.09 13,441,000 0.32 650,000,000 15.15 632,920,856 14.75 461,733,000 10.76 2,531,629,777 59.02 4,289,724,633 100.00	Immediately after allotment and issuance of all the Conversion Shares upon exercise of the conversion rights in full under the Convertible Bonds Number of Shares Approximate % 4,656,000 0.10 3,020,000 0.07 1,965,000 0.04 3,800,000 0.08 13,441,000 0.29 650,000,000 13.84 632,920,856 13.48 867,275,986 18.47 2,531,629,777 53.92 4,695,267,619 100.00	Immediately after allotment and issuance of all the Conversion Shares upon exercise of the conversion rights in full under the Convertible Bonds Number of Shares Approximate % 4,656,000 0.10 3,020,000 0.07 1,965,000 0.04 3,800,000 0.08 13,441,000 0.29 650,000,000 13.84 632,920,856 13.48 867,275,986 18.47 2,531,629,777 53.92 4,695,267,619 100.00
			0.29 13.84 13.48 18.47 53.92
			100.00

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LETTER FROM THE BOARD

Notes:

1. The 632,920,856 Shares were owned by Best Frontier which was owned as to 99.89% and 0.11% by Madam CHEUNG Kwai Lan and Mr. CHAN Tung Mei respectively. In addition, Madam CHEUNG and Mr. CHAN directly beneficially held 4,656,000 and 3,020,000 Shares respectively. Madam CHEUNG is the spouse of Mr. CHAN and so both of them were deemed to be interested in the Shares. An interest in 210,000,000 Shares as security was provided by Best Frontier to a person other than a qualified lender on 4 December 2020.

2. The 461,733,000 Shares were owned by Integrated Asset Management which was wholly-owned by Mr. YAM Tak Cheung. 8% coupon convertible bonds in aggregate amount of HK$89,625,000 (the ‘‘CBs’’) for a term of six months maturing on 17 July 2017 were issued to Integrated Asset Management pursuant to the first amendment agreement dated 18 January 2017 approved by the Shareholders at the extraordinary general meeting of the Company held on 29 March 2017. The Company received a written consent from Integrated Asset Management, on which the maturity date of the CBs would be extended for further six months to 17 January 2018. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset Management upon conversion of the CBs in full. The amended conversion price was HK$0.359 per conversion share subject to adjustment.

Pursuant to the second amendment agreement approved by the Shareholders at the extraordinary general meeting of the Company held on 18 April 2018, the amendments were that the maturity date of the CBs was extended for six months from 17 January 2018 to 17 July 2018, and further extended to 17 January 2019 upon a prior written consent from Integrated Asset Management. Such written consent from Integrated Asset Management has been received by the Company. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset Management upon conversion of the CBs in full.

Pursuant to the third amendment agreement approved by the Shareholders at the extraordinary general meeting of the Company held on 19 March 2019, the amendments were that the maturity date of the CBs was extended for six months from 17 January 2019 to 17 July 2019, and further extended to 17 January 2020 upon a prior written consent from Integrated Asset Management. Such written consent from Integrated Asset Management has been received by the Company. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset Management upon conversion of the CBs in full.

As a result of the adjustments of the CBs on 10 May 2019 upon the allotment and issue of the consideration shares to Sinopharm Traditional Chinese Medicine Overseas Holdings Limited, a maximum number of 263,602,941 Shares shall be allotted and issued to Integrated Asset Management upon conversion of the CBs in full. The adjusted conversion price is HK$0.34 per conversion share subject to further adjustment.

Pursuant to the fourth amendment agreement approved by the Shareholders at the extraordinary general meeting of the Company held on 25 March 2020, the amendments were that the maturity date of the CBs was extended for six months from 17 January 2020 to 17 July 2020, and further extended to 17 January 2021 upon a prior written consent from Integrated Asset Management. Such written consent from Integrated Asset Management has been received by the Company. A maximum number of 263,602,941 Shares would be allotted and issued to Integrated Asset Management upon conversion of the CBs in full.

Upon completion of the Fifth Amendment Agreement subject to the independent Shareholders’ approval, a maximum number of 405,542,986 Shares shall be allotted and issued to Integrated Asset Management upon conversion of the CBs in full and thereafter the shareholding of Integrated Asset Management shall be increased to approximately 20.22% of the current issued Share capital of the Company and approximately 18.47% of the enlarged issued Share capital of the Company. The amended conversion price shall be HK$0.221 per conversion share subject to adjustment. The maturity date of the CBs shall be extended for one year from 17 January 2021 to 17 January 2022.

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LETTER FROM THE BOARD

GEM LISTING RULES IMPLICATION

Pursuant to Rule 34.05 of the GEM Listing Rules, any alterations in the terms of convertible debt securities after issue must be approved by the Stock Exchange, except where the alterations take effect automatically under the existing terms of such convertible debt securities. The Company has applied to the Stock Exchange for its approval of the Proposed Amendments contemplated under the Fifth Amendment Agreement pursuant to Rule 34.05 of the GEM Listing Rules.

As at the Latest Practicable Date, the Bondholder is interested in 461,733,000 Shares, representing approximately 10.76% of the issued Share capital of the Company. Accordingly, the Bondholder is a substantial Shareholder and a connected person of the Company under Rule 20.07(1) of the GEM Listing Rules. Accordingly, the Proposed Amendments as contemplated under the Fifth Amendment Agreement constitutes a connected transaction of the Company under the GEM Listing Rules. As the Fifth Amendment Agreement and the transactions contemplated thereunder do not fall into any exemption under Rule 20.71 of the GEM Listing Rules, the Fifth Amendment Agreement (and the Proposed Amendments contemplated thereunder) is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules. The Specific Mandate for the allotment and issuance of the Conversion Shares will also be sought at the EGM.

EGM

The resolution(s) to be proposed at the forthcoming EGM are set out in full in the notice of the EGM on pages 31 to 33 of this circular. A form of proxy for use at the EGM is enclosed with this circular.

Integrated Asset Management and its associates will abstain from voting at the EGM on the resolution(s) relating to the Fifth Amendment Agreement and all transactions contemplated thereunder. Other than Integrated Asset Management and its associates, none of the Shareholders has a material interest in the transactions contemplated under the Fifth Amendment Agreement and accordingly, no other Shareholder will be required to abstain from voting on the relevant resolutions(s) at the EGM.

If you intend to appoint a proxy to attend the EGM, you are requested to complete the proxy form and return it to the Company’s Hong Kong branch share registrar and transfer office, Tricor Standard Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the EGM or adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournments thereof if you so wish and in such event, the proxy shall be deemed to be revoked.

Pursuant to Rule 17.47(4) of the GEM Listing Rules, any vote of the 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 show of hands. Therefore, all resolutions set out in the notice of EGM will be voted by way of poll at the EGM. The Company will announce the results of poll in the manner prescribed under Rule 17.47(5) of the GEM Listing Rules.

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LETTER FROM THE BOARD

RECOMMENDATIONS

Taking into account the reasons as set out in the paragraph headed ‘‘Reasons for and benefits of the Proposed Amendments’’ above, the Directors are of the view that the terms and conditions of the Convertible Bonds (as amended by the Fifth Amendment Agreement) are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

An Independent Board Committee (comprising all Independent non-executive Directors) has been formed to advise the Independent Shareholders and the Company has also appointed Gram Capital, the Independent Financial Adviser, to advise the Independent Board Committee and the Independent Shareholders regarding the Fifth Amendment Agreement and all the transactions contemplated thereunder.

The Independent Board Committee, having considered the advice of Gram Capital, is of the view that the terms and conditions of the Convertible Bonds (as amended by the Fifth Amendment Agreement) are fair, reasonable, on normal commercial terms, and although the Proposed Amendments are not in the ordinary and usual course of business of the Group, they are in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution(s) to be proposed at the EGM to approve the Fifth Amendment Agreement and the transactions contemplated thereunder including the grant of the Specific Mandate.

Accordingly, the Directors (including the independent non-executive Directors) recommend the Independent Shareholders to vote in favour of the ordinary resolution(s) to be proposed at the EGM to approve the Fifth Amendment Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate.

None of the Directors and their respective associates have material interest in the Fifth Amendment Agreement and the transactions contemplated thereunder and none were required to abstain from voting on the Board resolutions in relation thereto.

ADDITIONAL INFORMATION

Your attention is drawn to the (i) letter from the Independent Board Committee set out in this circular and (ii) letter from Gram Capital set out in this circular, which contains among other matters, Gram Capital’s advice to the Independent Board Committee and the Independent Shareholders in connection with the Fifth Amendment Agreement and the transactions contemplated thereunder and the principal factors considered by it in arriving at its recommendation.

Your attention is also drawn to the additional information contained in the appendix to this circular.

Yours faithfully, By Order of the Board Sinopharm Tech Holdings Limited 國藥科技股份有限公司 CHAN Ting Chairperson

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter of recommendation, prepared for the purpose of incorporation in the circular, from the Independent Board Committee to the Independent Shareholders in relation to the Fifth Amendment Agreement and the transactions contemplated thereunder.

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Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

5 March 2021

To the Independent Shareholders

Dear Sir or Madam,

1) CONNECTED TRANSACTION IN RELATION TO PROPOSED AMENDMENTS TO THE TERMS OF THE CONVERTIBLE BONDS; AND 2) PROPOSED GRANT OF SPECIFIC MANDATE TO ISSUE CONVERSION SHARES

INTRODUCTION

We refer to the circular of the Company dated 5 March 2021 to (the ‘‘Circular’’), of which this letter forms part. Capitalized terms used herein shall have the same meaning as those defined in the Circular unless the context otherwise requires.

We have been appointed by the Board to advise you on the terms of the Fifth Amendment Agreement, Proposed Amendments and the transaction contemplated thereunder, and the Specific Mandate and whether they are fair and reasonable so far as the Independent Shareholder are concerned.

Details of the advice of Gram Capital, together with the principal factors and reasons taken into consideration in arriving at such advice, are set out on pages 16 to 25 of the Circular. Your attention is also drawn to the letter from the Board set out on pages 4 to 13 of the Circular and the additional information set out in the appendix of the Circular.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

RECOMMENDATION

Having considered the terms and conditions of the Fifth Amendment Agreement, the principal factors and reasons considered by, and the advice of Gram Capital, we are of the view that the Fifth Amendment Agreement and the transactions contemplated thereunder are fair, reasonable, on normal commercial terms, and although the Proposed Amendments are not in the ordinary and usual course of business of the Group, they are in the interests of the Company and the Shareholders as a whole so far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the EGM to approve the Fifth Amendment Agreement and the transactions contemplated thereunder, and the Specific Mandate.

Mr. LAU Fai Lawrence

Yours faithfully, For and on behalf of Independent Board Committee Dr. LIU Ta-pei Mr. CHAU Wai Wah Fred

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LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Proposed Amendments for the purpose of inclusion in this circular.

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Room 1209, 12/F. Nan Fung Tower 88 Connaught Road Central/ 173 Des Voeux Road Central Hong Kong

5 March 2021

• To: The independent board committee and the independent shareholders of Sinopharm Tech Holdings Limited

Dear Sir/Madam,

CONNECTED TRANSACTION IN RELATION TO PROPOSED AMENDMENTS TO THE TERMS OF THE CONVERTIBLE BONDS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Proposed Amendments, details of which are set out in the letter from the Board (the ‘‘Board Letter’’) contained in the circular dated 5 March 2021 issued by the Company to the Shareholders (the ‘‘Circular’’), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

On 13 January 2014, the Company entered into the Subscription Agreement with Integrated Asset Management (i.e. the Bondholder) pursuant to which the Company conditionally agreed to issue the Convertible Bonds in the aggregate principal amount of HK$89,625,000 to Integrated Asset Management. On 17 January 2014, the Company completed the issue of the Convertible Bonds to Integrated Asset Management pursuant to the Subscription Agreement. On 18 January 2017, 18 January 2018, 17 January 2019 and 7 February 2020, the Company entered into the First Amendment Agreement, the Second Amendment Agreement, the Third Amendment Agreement and the Fourth Amendment Agreement with Integrated Asset Management respectively to amend certain terms and conditions of the Convertible Bonds.

On 19 January 2021 (after trading hours), the Company entered into the Fifth Amendment Agreement with Integrated Asset Management, pursuant to which the Company and Integrated Asset Management agreed to further amend certain term and conditions of the Convertible Bonds (i.e. the Proposed Amendments).

With reference to the Board Letter, the Proposed Amendments are subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.

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LETTER FROM GRAM CAPITAL

The Independent Board Committee comprising Mr. Lau Fai Lawrence, Dr. Liu Ta-pei and Mr. Chau Wai Wah Fred (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Proposed Amendments are on normal commercial terms and are fair and reasonable; (ii) whether the Proposed Amendments are in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote in respect of the resolution to approve the Proposed Amendments at the EGM. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors’ representation and confirmation that there is no undisclosed private agreement/arrangement or implied understanding with anyone concerning the Proposed Amendments. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 17.92 of the GEM Listing Rules.

The Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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 the 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 therein or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, the Bondholder or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Proposed Amendments. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after

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LETTER FROM GRAM CAPITAL

the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources while we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Proposed Amendments, we have taken into consideration the following principal factors and reasons:

1. Background of and reasons for the Proposed Amendments

Information on the Group

With reference to the Board Letter, the principal activities of the Group are provision of (i) lottery-related services, (ii) internet plus services (solution and supply chain), (iii) manufacturing and distribution of personal protective equipment and (iv) other services.

Set out below are the consolidated financial information of the Group for the six months ended 31 December 2020, the six months ended 31 December 2019 and the two years ended 30 June 2019 as extracted from the Company’s interim report for the six months ended 31 December 2020 (the ‘‘2020/21 Interim Report’’) and the Company’s annual report for the year ended 30 June 2020 (the ‘‘2019/20 Annual Report’’):

	For the year	For the year
	ended	ended	Year-on-year
	30 June 2020	30 June 2019	change
	HK$’000	HK$’000	%
	(audited)	(audited)
Revenue	165,934	43,503	281.43
Loss for the year	163,990	45,626	259.42

The Group recorded revenue of approximately HK$165.93 million for the year ended 30 June 2020 (‘‘FY2019/20’’), representing an increase of approximately 281.43% as compared to that for the year ended 30 June 2019 (‘‘FY2018/19’’). With reference to the 2019/20 Annual Report, revenue substantially increased as a result of the Company driving the new business on the manufacturing and distribution of personal protective equipment and the high demand on the supply chain services for medical devices and supplies.

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LETTER FROM GRAM CAPITAL

The Group recorded loss of approximately HK$163.99 million for FY2019/20, representing an increase of approximately 259.42% as compared to that for FY2018/19. With reference to the 2019/20 Annual Report and as advised by the Directors, such increase in loss was mainly due to the increase in impairment losses on goodwill made for FY2019/20 as compared to that for FY2018/19.

	For the six	For the six
	months ended	months ended
	31 December	31 December	Year-on-year
	2020	2019	change
	HK$’000	HK$’000	%
	(unaudited)	(unaudited)
Revenue	55,200	87,380	(36.83)
Loss for the period	14,627	18,270	(19.94)

The Group recorded revenue of approximately HK$55.20 million for the six months ended 31 December 2020 (‘‘HY2020/21’’), representing a decrease of approximately 36.83% as compared to that for the six months ended 31 December 2019 (‘‘HY2019/20’’). With reference to the 2020/21 Interim Report and as advised by the Directors, the decrease in revenue was mainly due to the decrease in revenue from the internet plus solution and supply chain services segments.

The Group recorded loss of approximately HK$14.63 million for HY2020/21, representing a decrease of approximately 19.94% as compared to that for HY2019/20. With reference to the 2020/21 Interim Report and as advised by the Directors, such decrease in loss was mainly due to the decrease in administrative and operating expenses and increase in other income for HY2020/21 as compared to that for HY2019/20 and the share of profits of associates recorded in HY2020/21.

With reference to the 2020/21 Interim Report, as at 31 December 2020, the Group recorded bank balances and cash and net liabilities of approximately HK$2.67 million and HK$83.62 million respectively.

Information on Integrated Asset Management

With reference to the Board Letter, Integrated Asset Management is principally engaged in investment holding and is wholly owned by Mr. Yam Tak Cheung.

Reasons for the Proposed Amendments

As advised by the Directors, if the Convertible Bonds were not extended and converted, it would expire on 17 January 2021 and the Company would be obligated to repay the outstanding principal amount of the Convertible Bonds (being HK$89,625,000) together with all unpaid interests accrued immediately. As mentioned above, the Group only had bank balances and cash of approximately HK$2.67 million as at 31 December 2020, which would be insufficient to repay the outstanding principal amount of the Convertible Bonds (being HK$89,625,000) together with the unpaid interests accrued. Upon our further enquiry, the Directors also confirmed that the Group has insufficient internal resources as at the Latest Practicable Date for repayment of the Convertible Bonds.

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LETTER FROM GRAM CAPITAL

With reference to the Board Letter, the Proposed Amendments were arrived at after arm’s length negotiation between the Company and Integrated Asset Management. The Board considers that the extended time for the repayment to the Bondholder will be beneficial to the Company and its operations by mitigating the pressure on its cash flows. As requested by Integrated Asset Management, the extension in time should make an adjustment on the conversion price. The Directors considered that the adjustment on the conversion price which makes it closer to the prevailing market price will incentivize the Bondholder to convert all or part of the Convertible Bonds not previously converted.

Apart from the extension of maturity date of the Convertible Bonds under the Proposed Amendments, for our due diligence purpose, we noted the following regarding Group’s recent financing activities/initiatives:

• With reference to the 2020/21 Interim Report, the Group had total assets of approximately HK$205.95 million (of which goodwill amounted to approximately HK$46.14 million, while property, plant and equipment only amounted to approximately HK$22.22 million), bank balances and cash of approximately HK$2.67 million and net liabilities of approximately HK$83.62 million as at 31 December 2020. We also noted that the Group recorded loss for five consecutive financial years since the year ended 30 June 2016. In view of the Group’s loss making position for FY2019/20, net liabilities position as at 31 December 2020 and the lack of available assets collateral, the Board considered that it is difficult for the Group to obtain bank borrowings at favourable terms.

• With reference to the 2020/21 Interim Report, the Company had amounts due to Directors of approximately HK$32.51 million as at 31 December 2020. As advised by the Directors, such loans are unsecured, interest free and have no fixed repayment term.

• With reference to the 2019/20 Annual Report, on 10 October 2019, a wholly-owned subsidiary of the Company issued a promissory note (the ‘‘Promissory Note’’) with the principal amount of US$2,000,000, which was payable on or before 11 October 2020, to a third party. Interest on the Promissory Note was charged at 12% per annum. As advised by the Directors, following the expiry of the said term, the said subsidiary and the note holder agreed to extend the maturity of the Promissory Note to March 2021 with interest increased to 18% per annum. As at 31 December 2020, the principal amount of the Promissory Note amounted to approximately US$1,900,000.

With reference to the Board Letter, the Company will seek for any possibilities to raise fund through the debt or equity financing continuously for the repayment of the Convertible Bonds. Also, the Company will discuss with the Bondholder to consider any possibilities to convert all or part of the Convertible Bonds.

Having considered the above factors, in particular (i) our independent work done on the Group’s financial position (such as consecutive loss positions during recent financial years and net liabilities position, lack of valuable tangible assets, low bank balances and cash as at 31 December 2020) and recent financing activities/initiatives;

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LETTER FROM GRAM CAPITAL

and (ii) that the Group has insufficient internal resources as at the Latest Practicable Date for repayment of the Convertible Bonds, we are of the view that although the Proposed Amendments are not in the ordinary and usual course of business of the Group, they are in the interest of the Company and the Shareholders as a whole.

2. Principal terms of the Proposed Amendments

Pursuant to the Fifth Amendment Agreement, the Company and Integrated Asset Management agreed to amend the term and condition of the Convertible Bonds as follows:

• The conversion price of the Convertible Bonds shall be amended from HK$0.34 per Share to HK$0.221 per Share, which can be converted into for the maximum number of 405,542,986 Shares.

• The Maturity Date of the Convertible Bonds issued under the Subscription Agreement shall be extended for one year from 17 January 2021 to 17 January 2022.

• Clause 5 of Schedule 2 set in the Subscription Agreement regarding the bearing interest rate of the Convertible Bonds shall be increased to 10% per annum and interest shall be paid annually from the date of the Fifth Amendment Agreement.

Save and except for the aforesaid, there are no other amendments to the terms of the Convertible Bonds.

Analysis on the Conversion Price

The Conversion Price at HK$0.221 per Conversion Share pursuant to the Fifth Amendment Agreement, represents:

• (a) a discount of approximately 25.08% to the closing price per Share of HK$0.295 as quoted on the Stock Exchange on the Latest Practicable Date;

• (b) a discount of approximately 19.64% to the closing price per Share of HK$0.275 as quoted on the Stock Exchange on 19 January 2021 (the date of the Fifth Amendment Agreement);

• (c) a discount of approximately 15.65% to the average closing price per Share of approximately HK$0.262 as quoted on the Stock Exchange for the last five consecutive trading dates up to and including 19 January 2021 (the date of the Fifth Amendment Agreement); and

• (d) a premium of approximately 3.27% to the average closing price per Share of approximately HK$0.214 as quoted on the Stock Exchange for the last 20 consecutive trading dates up to and including 19 January 2021 (the date of the Fifth Amendment Agreement).

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LETTER FROM GRAM CAPITAL

In order to assess the fairness and reasonableness of the Conversion Price, we reviewed the daily closing price of the Shares as quoted on the Stock Exchange from 20 January 2020 up to and including 19 January 2021 (the ‘‘Review Period’’), being a period of one year prior to and including the date of the Fifth Amendment Agreement. The comparison of daily closing prices of the Shares, the Conversion Price and original conversion price (before the Proposed Amendments) is illustrated as follows:

Historical daily closing price per Share

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----- Start of picture text -----

HK$
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2021
Closing price Conversion Price Original conversion price
----- End of picture text -----

Source: the Stock Exchange’s website

During the Review Period, the lowest and highest closing prices of Shares as quoted on the Stock Exchange were HK$0.115 recorded on 3 December 2020 and HK$0.355 per Share recorded on 18 February 2020 respectively. The Conversion Price of HK$0.221 is within the range of the lowest and highest closing price of Shares as quoted on the Stock Exchange during the Review Period.

The closing price of Shares fluctuated during the Review Period. The closing price of Shares was HK$0.243 on 20 January 2020 at the start of the Review Period. The closing price of Shares was relatively stable from the start of the Review Period to mid-February 2020. After that, the closing price increased substantially from HK$0.275 on 17 February 2020 and to its peak at HK$0.355 on 18 February 2020. Since then, the closing price of Shares experienced a generally decreasing trend until reaching its low at HK$0.115 on 3 December 2020. The closing price of Shares increased substantially during December 2020 and January 2021, reaching HK$0.275 on 19 January 2021, being the date of the Fifth Amendment Agreement.

The original conversion price (before the Proposed Amendments) of HK$0.34 was higher than the closing price of Shares during the entire Review Period (except for 18 February 2020 when the closing price of Shares reached its peak at HK$0.355); while the Conversion Price was higher than the closing price of Shares in 162 trading days of 248 trading days during the Review Period. The Conversion Price was higher than the closing price of Shares during the entire period from 18 May 2020 to 4 January 2021.

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LETTER FROM GRAM CAPITAL

As part of our analysis, we further identified subscription/placing of convertible bonds/notes under specific mandate (excluding issuance under restructuring and consideration issuance for acquisition) (the ‘‘CB Comparables’’) which were announced by companies listed on the Stock Exchange from 20 October 2020 up to 19 January 2021, being a period of three months prior to and including the date of the Fifth Amendment Agreement. To the best of our knowledge and as far as we are aware of, we found 11 transactions which met the said criteria and they are exhaustive as far as we are aware of. Shareholders should note that the businesses, operations and prospects of the Company are not the same as the subject companies of the CB Comparables.

					Premium/	Premium/
				(discount) of the		(discount) of the
				conversion price		conversion price
				to average closing		to average closing
			Premium/	price per share		price per share
			(discount) of the	for	the last five	for the last 20
			conversion price		consecutive	consecutive
			to closing price	trading days up to		trading days up to
			per share on the	and including the		and including the
			date of agreement	date of agreement		date of agreement
			in relation to the	in relation to the		in relation to the
			respective		respective	respective
			subscription/	subscription/		subscription/
			placing of		placing of	placing of
	Date of	Interest rate	convertible bonds/	convertible bonds/		convertible bonds/
Company name (stock code)	announcement	per annum	notes		notes	notes
		(%)	(%)		(%)	(%)
China Regenerative Medicine	20 October 2020	Nil	(1.48)		Nil	0.50
International Limited (8158)
Grand Field Group Holdings	17 November 2020	5	1.27		1.27	3.90
Limited (115)
Union Medical Healthcare Limited	18 November 2020	2.5	7.77		10.31	21.61
(2138)
Union Medical Healthcare Limited	18 November 2020	2.5	7.77		10.31	21.61
(2138)
Union Medical Healthcare Limited	18 November 2020	2.5	(1.33)		1.01	11.35
(2138)
CAR Inc. (699)	3 December 2020	5	5.82		6.10	11.89
North Mining Shares Company	22 December 2020	8	6.67		6.67	6.67
Limited (433)
SinoMab BioScience Limited	22 December 2020	4.95	24.69		37.89	57.48
(3681)
Genertec Universal Medical Group	29 December 2020	2	14.29		12.71	11.79
Company Limited (2666)
Century Entertainment	30 December 2020	Nil	(1.96)		2.04	0.00
International Holdings Limited
(959)
Earthasia International Holdings	19 January 2021	5.5	14.04		15.25	(52.03)
Limited (6128)
Maximum		8	24.69		37.89	57.48
Minimum		Nil	(1.96)		Nil	(52.03)
Average		3.45	7.05		9.42	8.61
The Proposed Amendments	19 January 2021	10	(19.64)		(15.65)	3.27

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LETTER FROM GRAM CAPITAL

The conversion prices of the CB Comparables ranged from (i) a discount of approximately 1.96% to a premium of approximately 24.69% to the respective closing price per share on the date of agreement in relation to the respective subscription/placing of convertible bonds/notes (the ‘‘Agreement Date CB Discount/Premium Market Range’’); (ii) nil discount/premium to a premium of approximately 37.89% to the respective average closing price per share for the last five consecutive trading days up to and including the date of agreement in relation to the respective subscription/placing of convertible bonds/notes (the ‘‘5-days Average CB Discount/Premium Market Range’’); and (iii) a discount of approximately 52.03% to a premium of approximately 57.48% to the respective average closing price per share for the last 20 consecutive trading days up to and including the date of agreement in relation to the respective subscription/placing of convertible bonds/notes (the ‘‘20-days Average CB Discount/Premium Market Range’’).

The Conversion Price, which represents (i) a discount of approximately 19.64% to the closing price of Shares on the date of the Fifth Amendment Agreement; (ii) a discount of approximately 15.65% to the average closing price of Shares as quoted on the Stock Exchange for the five consecutive trading days up to and including the date of the Fifth Amendment Agreement; and (iii) a premium of approximately 3.27% to the average closing price of Shares as quoted on the Stock Exchange for the 20 consecutive trading days up to and including the date of the Fifth Amendment Agreement, falls out of the Agreement Date CB Discount/Premium Market Range and the 5-days Average CB Discount/Premium Market Range but is within the 20-days Average CB Discount/Premium Market Range.

Despite that the Conversion Price (which represents a discount of approximately 19.64% to the closing price of Shares on the date of Fifth Amendment Agreement; and a discount of approximately 15.65% to the average closing price of Shares as quoted on the Stock Exchange for the five consecutive trading days up to and including the date of the Fifth Amendment Agreement) falls out of the Agreement Date CB Discount/Premium Market Range and the 5-days Average CB Discount/Premium Market Range respectively, taking into account, that (i) the Conversion Price falls within the range of the lowest and highest closing prices of the Shares as quoted on the Stock Exchange during the Review Period; (ii) the Conversion Price was higher than the closing price of Shares in 162 trading days of 248 trading days during the Review Period and was higher than the closing price of Shares during the entire period from 18 May 2020 to 4 January 2021; (iii) the Group has insufficient internal resources as at the Latest Practicable Date for repayment of the Convertible Bonds; (iv) the original conversion price (before the Proposed Amendments) was higher than the closing price of Shares during the entire Review Period (except for 18 February 2020 when the closing price of Shares reached its peak at HK$0.355), it is justifiable for the Company to bring the conversion price closer to the prevailing market level of the Share price in order to incentivize the Bondholder to convert all or part of the Convertible Bonds; and (v) the Conversion Price, which represents a premium of approximately 3.27% to the average closing price of Shares as quoted on the Stock Exchange for the 20 consecutive trading days up to and including the date of the Fifth Amendment Agreement, falls within the 20-days Average CB Discount/Premium Market Range, we consider the Conversion Price under the Fifth Amendment Agreement to be justifiable.

Analysis on the interest rate

As shown in the table above, the CB Comparables have an annual interest rate of nil to 8% (the ‘‘Interest Market Range’’). The interest rate of 10% per annum born by the Convertible Bonds pursuant to the Fifth Amendment Agreement (the ‘‘Adjusted

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LETTER FROM GRAM CAPITAL

Interest Rate’’) is higher than the Interest Market Range. Nevertheless, having considered that (i) the Group has insufficient internal resources as at the Latest Practicable Date for repayment of the Convertible Bonds; (ii) the Proposed Amendments were arrived at after arm’s length negotiation between the Company and Integrated Asset Management; and (iii) the Adjusted Interest Rate is lower than the Group’s borrowing costs under the Promissory Note (i.e. 18% per annum), we consider the Adjusted Interest Rate to be justifiable.

For further details of the Proposed Amendments, please refer to the section headed ‘‘THE FIFTH AMENDMENT AGREEMENT’’ of the Board Letter.

Taking into account the above, we are of the view that the terms of the Proposed Amendments are on normal commercial terms and are fair and reasonable.

3. Possible dilution effect on the shareholding interests of the public Shareholders

Based on the shareholding table in the section headed ‘‘CHANGES IN SHAREHOLDING STRUCTURE’’ of the Board Letter, (i) the shareholding interests of public Shareholders (i.e. approximately 55.60% of the total issued share capital of the Company as at the Latest Practicable Date assuming the Convertible Bonds being fully converted at the original conversion price of HK$0.34) would be further diluted by approximately 1.68 percentage point as a result of the Proposed Amendments (assuming the Convertible Bonds being fully converted at the Conversion Price of HK$0.221); and (ii) the shareholding interests of public Shareholders (i.e. approximately 59.02% of the total issued share capital of the Company as at the Latest Practicable Date) would be diluted by approximately 5.10 percentage point immediately after allotment and issuance of all the Conversion Shares upon exercise of the conversion rights under the Convertible Bonds at the Conversion Price of HK$0.221. Taking into account (i) the aforementioned reasons for the Proposed Amendments; and (ii) the terms of the Proposed Amendments being fair and reasonable, we are of the view that the said dilution is justifiable.

RECOMMENDATION

Having taken into consideration of the factors and reasons as stated above, we are of the opinion that (i) the terms of the Proposed Amendments are on normal commercial terms and are fair and reasonable; and (ii) although the Proposed Amendments are not in the ordinary and usual course of business of the Group, they are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Proposed Amendments and we recommend the Independent Shareholders to vote in favour of the resolution in this regard.

Yours faithfully, For and on behalf of Gram Capital Limited Graham Lam Managing Director

Note: Mr. Graham Lam is a licensed person registered with the Securities and Futures Commission and a responsible officer of Gram Capital Limited to carry out Type 6 (advising on corporate finance) regulated activity under the SFO. He has over 25 years of experience in investment banking industry.

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APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and Chief Executive’s Interests and Short Positions in the Shares of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules to be notified to the Company and the Stock Exchange, were as follows:

Long position in the Shares and underlying Shares of the Company or any of its associated corporation

Name of Directors The Company/Name of Associated Corporation Madam CHEUNG Kwai Lan (‘‘Madam CHEUNG’’) (Note 1) The Company Mr. CHAN Tung Mei (‘‘Mr. CHAN’’) (Note 1) The Company Madam CHEUNG Best Frontier(Note 1) Mr. CHAN Best Frontier(Note 1) Mr. CHAU Wai Wah Fred The Company Dr. CHENG Yanji The Company	Number of Shares Held Interest in Controlled Corporation Personal Interest Interest of Spouse Total Interest Approximate Percentage of Shareholding (Note 2) 632,920,856 4,656,000 3,020,000 640,596,856 15.11% — 3,020,000 637,576,856 640,596,856 15.11% — 909 1 910 — — 1 909 910 — — 3,800,000 — 3,800,000 0.17% — 1,965,000 — 1,965,000 0.13%

Notes:

1. 632,920,856 Shares were owned by Best Frontier which was owned as to 99.89% and 0.11% by Madam CHEUNG and Mr. CHAN respectively. In addition, Madam CHEUNG and Mr. CHAN directly held 4,656,000 Shares and 3,020,000 Shares respectively. Accordingly, Madam CHEUNG is the spouse of Mr. CHAN and so both of them were deemed to be interested in the Shares. An interest in 210,000,000 Shares as security was provided by Best Frontier to a person other than a qualified lender on 4 December 2020.

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GENERAL INFORMATION

APPENDIX

1. As disclosed in the announcement of the Company dated 7 January 2020, on 7 January 2020, the Company granted share options (the ‘‘Option(s)’’) to certain eligible persons, including the Directors, pursuant to the share option scheme of the Company adopted on 31 January 2013 to subscribe for an aggregate of 92,800,000 ordinary shares of HK$0.0125 each in the share capital of the Company. The following Options were granted to the following Directors:

Madam CHEUNG	4,000,000 Options
Mr. CHAN Ting	4,000,000 Options
Mr. CHAN	3,600,000 Options
Dr. CHENG Yanjie	3,600,000 Options
Dr. LIU Ta-pei	3,600,000 Options
Mr. CHAU Wai Wah Fred	3,600,000 Options

None of the Directors has exercised his or her Options as at the Latest Practicable Date. The Directors are deemed to be interested in the Options granted to him or her for the purpose of Part XV of the SFO.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had or was deemed to have any interests or short positions in any Shares, debentures or underlying Shares of the Company and its associated corporations (within the meaning of Part XV of the SFO) that are required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein or which were required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by the Directors, to be notified to the Company and the Stock Exchange.

(b) Substantial Shareholders’ Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company

As at the Latest Practicable Date, according to the register kept by the Company pursuant to section 336 of SFO, and so far as is known to any Directors or chief executive of the Company, the following persons (other than the Directors or chief executive of the Company) had, or was deemed or taken to have, an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Long Positions in the Shares

			Approximate
		Number of issued	Percentage of the
Name of Shareholders	Capacity	Shares Held	Shareholding
Sinopharm Traditional	Beneficial Owner	650,000,000	15.15%
Chinese Medicine Overseas
Holdings Limited
Best Frontier & its concert	Beneficial Owner	640,596,856	14.93%
parties (Note 1)
Integrated Asset Management	Beneficial Owner	461,733,000	10.76%
& its concert parties (Note 2)
Mr. TSE Siu Hoi	Beneficial Owner	310,650,000	7.24%

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APPENDIX

GENERAL INFORMATION

Notes:

1. Same as Note 1 on page 11 in this circular

2. Same as Note 2 on page 11 in this circular

Save as disclosed above, as at the Latest Practicable Date, the Directors or chief executive of the Company were not aware of any person (other than a Director or chief executive of the Company) who had an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 an 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under section 336 of the SFO.

3. COMPETING INTERESTS

As at the Latest Practicable Date, none of Directors, the substantial Shareholders nor the controlling shareholders of the Company or any of their respective close associates (as defined under the GEM Listing Rules) had any interest in any business which competes or is likely to compete, directly or indirectly, with the business of the Group.

4. DIRECTORS’ SERVICE CONTRACTS

The executive Director has entered into a service contract with the Company with effect from the date of appointment and will continue thereafter unless and until terminated by either party by giving not less than six months’ notice in writing served by either party on the other. All the independent non-executive Directors and non-executive Directors have not entered into any service contracts with the Company but they are subject to retirement by rotation and re-election in accordance with the articles of association of the Company.

As at the Latest Practicable Date, none of the Directors had entered into or proposed to enter into, a service contract with any member of the Group which is not determinable by such member of the Group within one year without payment of compensation, other than statutory compensation.

5. DIRECTORS’ INTERESTS IN CONTRACT OR ARRANGEMENT

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement with any member of the Group subsisting which was significant in relation to the business of the Group, nor has any Director had any direct or indirect interest in any assets which have been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group since 30 June 2020, being the date to which the latest published audited financial statements of the Group were made up.

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APPENDIX

GENERAL INFORMATION

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position or prospects of the Group since 30 June 2020, being the date to which the latest published audited financial statements of the Group were made up.

7. LITIGATION

So far as the Directors are aware, as at the Latest Practicable Date, no member of the Group was involved in any litigation or claim of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened by or against any member of the Group.

8. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has given opinions or advice which are contained in this circular:

Name Qualifications Gram Capital Limited A licensed corporation to carry out Type 6 (advising on corporate finance) regulated activity under the SFO

Gram Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion therein of its letter and/or reference to its name, in the form and context in which they appear.

As at the Latest Practicable Date, Gram Capital was not beneficially interested in the share capital of any member of the Group nor had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities which carry voting rights in any member of the Group, nor did it have any interest, directly or indirectly, in any asset which had been, since 30 June 2020, being the date to which the latest published audited financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

9. MISCELLANEOUS

• (i) The registered office of the Company is situated at Second Floor, Century Yard, Cricket Square, P.O. Box 902, Grand Cayman KY1-1103, Cayman Islands.

• (ii) The principal place of business of the Company in Hong Kong is at Units 01–03, 25/F., Corporation Park, 11 On Lai Street, Shatin, New Territories, Hong Kong.

• (iii) The company secretary of the Company is Mr. Ho Kam Kin, who was appointed on 1 September 2016.

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APPENDIX

GENERAL INFORMATION

• (iv) The Company’s branch share registrar and transfer office in Hong Kong is Tricor Standard Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection at the office of the Company at Units 01–03, 25/F, Corporation Park, 11 On Lai Street, Shatin, New Territories, Hong Kong, during 10: 00 a.m. to 4: 00 p.m. on any Business Day from the date of this circular up to and including the date of the EGM:

• (a) the Subscription Agreement.

• (b) the First Amendment Agreement;

• (c) the Second Amendment Agreement;

• (d) the Third Amendment Agreement;

• (e) the Fourth Amendment Agreement;

• (f) the Fifth Amendment Agreement;

• (g) the director’s service contract referred to in the paragraph headed ‘‘Directors’ Service Contracts’’ in this Appendix;

• (h) the written consent of the expert referred to in the paragraph headed ‘‘Qualification and Consent of Expert’’ in this Appendix;

• (i) the letter from the Independent Board Committee, the text of which is set out on pages 14 to 15 in this circular;

• (j) the letter of advice from Gram Capital to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 16 to 25 in this circular; and

• (k) this circular.

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NOTICE OF EGM

==> picture [77 x 76] intentionally omitted <==

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘EGM’’) of the Sinopharm Tech Holdings Limited (the ‘‘Company’’) will be held at Units 01–03, 25/F, Corporation Park, 11 On Lai Street, Shatin, New Territories, Hong Kong on Monday, 22 March 2021 at 11: 00 a.m., for the purpose of considering and, if thought fit, passing the following resolution:

ORDINARY RESOLUTION

‘‘THAT:

• (a) the fifth amendment agreement dated 19 January 2021 (the ‘‘Fifth Amendment Agreement’’) entered into between the Company (as issuer) and Integrated Asset Management (Asia) Limited (as the bondholder), in relation to the proposed amendments of the term and condition of the 8% coupon convertible bonds due 17 January 2021 in the aggregate amount of HK$89,625,000 (the ‘‘Convertible Bonds’’) (details relating to the Fifth Amendment Agreement are set out in the circular of the Company dated 5 March 2021, and a copy of the Fifth Amendment Agreement has been produced at the EGM and marked ‘‘A’’ and initialed by the chairman of the EGM for the purpose of identification), be and are hereby approved, confirmed and ratified;

• (b) subject to The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) consenting to the alteration to the terms and conditions of the Convertible Bonds and the Stock Exchange granting approval for the listing of, and permission to deal in, the shares of the Company that may be issued pursuant to the terms and conditions (as amended by the Fifth Amendment Agreement) of the Convertible Bonds (the ‘‘Conversion Shares’’ and each a ‘‘Conversion Share’’), the directors of the Company (the ‘‘Directors’’) be and are hereby granted a specific mandate (the ‘‘Specific Mandate’’) to allot, issue and otherwise deal with the Conversion Shares which may be allotted and issued by the Company upon the exercise of the conversion right attaching to the Convertible Bonds in the principal amount of HK$89,625,000 at the conversion price of HK$0.221 per Conversion Share in

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NOTICE OF EGM

accordance with the terms and conditions of the Convertible Bonds as amended by the Fifth Amendment Agreement, provided that the Specific Mandate shall be in addition to and shall not prejudice nor revoke the existing general mandate granted to the Directors by the shareholders of the Company in the extraordinary general meeting of the Company held on 20 November 2020, and to do all such things and acts and execute all such documents in connection with the issue and allotment of the Conversion Shares; and

• (c) any one Director be and is hereby authorised to do all such further acts and things and to sign and execute all such other or further documents and to take all such steps which, in the opinion of such Director, may be necessary, appropriate, desirable or expedient to implement and/or give effect to the terms of, or the transactions contemplated by, the Fifth Amendment Agreement and to agree to such variation, amendments or waiver of matters relating thereto as are, in the opinion of such Director, in the interests of the Company and its shareholders as a whole.’’

By order of the Board Sinopharm Tech Holdings Limited 國藥科技股份有限公司 CHAN Ting Chairperson

Hong Kong, 5 March 2021

Registered Office: Second Floor, Century Yard Cricket Square, P.O. Box 902 Grand Cayman KY1-1103 Cayman Islands

Head office and principal place of business in Hong Kong: Units 01–03, 25/F, Corporation Park 11 On Lai Street Shatin, New Territories Hong Kong

Notes:

1. A shareholder of the Company entitled to attend and vote at the EGM (or at any adjournment thereof) is entitled to appoint another person as his/her/its proxy to attend and vote in his/her/its stead in accordance with the articles of association of the Company. A proxy need not be a shareholder of the Company. A form of proxy for use at the EGM is enclosed.

2. In order to be valid, this form of proxy together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority, must be deposited at the Hong Kong branch share registrar and transfer office of the Company, Tricor Standard Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and

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NOTICE OF EGM

• return a form of proxy will not preclude a shareholder of the Company from attending in person and voting at the EGM or any adjournment thereof, should he/she/it so wish and in such event, the proxy shall be deemed to be revoked.

• In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of other joint holder(s), and for this purpose, seniority will be determined by the order in which the names stand in the register of members of the Company in respect of such shares.

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