SPT Energy Group Inc. - Proxy Solicitation & Information Statement 2013

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 you should take, you should consult a licensed securities dealer, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Winteam Pharmaceutical Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank manager, 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.

This circular appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of Winteam Pharmaceutical Group Limited.

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(Incorporated in Hong Kong with limited liability) (Stock Code: 570)

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY SINOPHARM FUND TRUSTEE UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser to Winteam Pharmaceutical Group Limited

Optima Capital Limited

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

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A notice convening the extraordinary general meeting of Winteam Pharmaceutical Group Limited to be held at Conference Room, 1st Floor, No. 2 Rong Gui Qiao Xi Road, Shunde District, Foshan City, Guangdong Province, the PRC on Wednesday, 3 July 2013 at 10:30 a.m. is set out on pages 37 and 38 of this circular. Whether or not you intend to attend the meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the registered office of Winteam Pharmaceutical Group Limited at Rooms 2801-2805, China Insurance Group Building, 141 Des Voeux Road Central, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or any adjournment of it, if you so wish.

14 June 2013

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Letter from Guotai Junan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	32
Notice of the Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37

– i –

DEFINITIONS

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

“Acquisition”
the proposed acquisition of the entire issued share capital of Tongjitang Chinese Medicine Company pursuant to the Acquisition Agreement
“Acquisition Agreement”
the conditional agreement dated 23 May 2013 entered into among the Company, Mr. Wang Xiaochun, Hanmax Investment Limited and Fosun Industrial Co., Limited in relation to the Acquisition
“Announcement”
the Company’s announcement dated 24 May 2013 in relation to, among other things, the Acquisition and the Sinopharm Subscription
“associate(s)”
has the meaning ascribed to it under the Listing Rules
“Board” the board of Directors
“Business Day(s)”
any day(s) other than a Saturday, Sunday or other day on which commercial banks in the PRC, Hong Kong and the British Virgin Islands are required or authorized by law or executive order to be closed or on which a tropical cyclone warning no. 8 or above or a “black” rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m. Hong Kong time
“CNPGC”
China National Pharmaceutical Group Corporation（中國醫藥集團總公司）, a state-owned enterprise established in the PRC and the ultimate holding company of Sinopharm
“Company”
Winteam Pharmaceutical Group Limited （盈天醫藥集團有限公司）, a company incorporated in Hong Kong with limited liability, the issued Shares of which are listed on the Main Board of the Stock Exchange (stock code: 570)
“connected person(s)”
has the meaning ascribed to it under the Listing Rules
“controlling shareholder(s)”
has the meaning ascribed to it under the Listing Rules
“Director(s)”
director(s) of the Company

– 1 –

DEFINITIONS

“EGM” the extraordinary general meeting of the Company to be convened and held to consider and, if thought fit, approve the Sinopharm Subscription Agreement and the allotment and issue of the Sinopharm Shares under specific mandate
“Group” the Company and its subsidiaries
“Guotai Junan” Guotai Junan Capital Limited, a licensed corporation under the SFO registered to conduct Type 6 (advising on corporate finance) regulated activities as defined under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders on the Sinopharm Subscription
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Independent Board Committee” the committee of the Board comprising Mr. Fang Shuting, an independent non-executive Director, established for the purpose of giving a recommendation to the Independent Shareholders on the Sinopharm Subscription
“Independent Shareholders” Shareholders other than Sinopharm and its associates
“Issue Price” HK$3.10 per Share, being the issue price of the Sinopharm Shares
“Last Trading Day” 10 May 2013, being the last trading day of the Shares prior to the signing of the Sinopharm Subscription Agreement
“Latest Practicable Date” 11 June 2013, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange
“Mr. Yang”
Mr. Yang Bin, an executive Director and the Managing Director of the Company
“PRC”
The People’s Republic of China, which for the purpose of this circular excludes Hong Kong, Macau Special Administrative Region and Taiwan

– 2 –

DEFINITIONS

“SFO”
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Share(s)” ordinary share(s) of HK$0.1 each in the share capital of the Company
“Shareholder(s)” the holder(s) of the issued Share(s)
“Sinopharm” Sinopharm Group Hongkong Co., Limited（國藥集團香港有限公司）, a company incorporated in Hong Kong with limited liability and the controlling Shareholder
“Sinopharm Fund”
上海國藥股權投資基金合伙企業（有限合伙） (Shanghai Sinopharm Equity Investment Fund Partnership (Limited Partnership)*), a limited partnership established under the PRC laws and managed by its general partner which is an associate of Sinopharm
“Sinopharm Fund Trustee”
華寶信托有限責任公司 (Hwabao Trust Co., Ltd*), a limited liability company established under the PRC laws, which acts as the trustee of Sinopharm Fund pursuant to the terms and conditions of the Trust Agreement
“Sinopharm Shares”
the 125,000,000 new Shares to be allotted and issued to Sinopharm Fund Trustee pursuant to the Sinopharm Subscription Agreement
“Sinopharm Subscription”
the subscription of the Sinopharm Shares by Sinopharm Fund Trustee pursuant to the Sinopharm Subscription Agreement
“Sinopharm Subscription Agreement”
the agreement dated 23 May 2013 entered into between the Company and Sinopharm Fund Trustee in relation to the Sinopharm Subscription
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“substantial shareholder(s)”
has the meaning ascribed to it under the Listing Rules

– 3 –

DEFINITIONS

華寶‧境外市場投資2號系列三期QDII單一資金信托2號系列三期QDII單一資金信托號系列三期QDII單一資金信托QDII單一資金信托單一資金信托 (Hwabao – Overseas Investment Series 2 No. 3 QDII Single Money Trust*), a trust agreement between Sinopharm Fund Trustee and Sinopharm Fund under which Sinopharm Fund Trustee shall, acting in its capacity as the trustee of Sinopharm Fund and solely for the benefit and in the interest of Sinopharm Fund, conditionally subscribe for and hold the Sinopharm Shares on trust for Sinopharm Fund

“Trust Agreement” 華寶‧境外市場投資2號系列三期QDII單一資金信托2號系列三期QDII單一資金信托號系列三期QDII單一資金信托QDII單一資金信托單一資金信托 (Hwabao – Overseas Investment Series 2 No. 3 Single Money Trust*), a trust agreement between Sinopharm Fund Trustee and Sinopharm Fund which Sinopharm Fund Trustee shall, acting in capacity as the trustee of Sinopharm Fund and solely for the benefit and in the interest of Sinopharm Fund, conditionally subscribe for and hold the Sinopharm Shares on trust for Sinopharm Fund “HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “%” per cent.

* For identification purposes only

– 4 –

LETTER FROM THE BOARD

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(Incorporated in Hong Kong with limited liability) (Stock Code: 570)

Executive Directors: Mr. WU Xian (Chairman) Mr. YANG Bin (Managing Director)

Non-Executive Directors:

Registered Office: Rooms 2801-2805 China Insurance Group Building 141 Des Voeux Road Central Hong Kong

Mr. SHE Lulin Mr. LIU Cunzhou Mr. DONG Zenghe Mr. ZHAO Dongji

Independent Non-Executive Directors:

Mr. ZHOU Bajun Mr. XIE Rong Mr. FANG Shuting

14 June 2013

To the Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY SINOPHARM FUND TRUSTEE UNDER SPECIFIC MANDATE

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

On 23 May 2013, the Company and Sinopharm Fund Trustee, the trustee of Sinopharm Fund, entered into the Sinopharm Subscription Agreement pursuant to which the Company conditionally agreed to allot and issue, and Sinopharm Fund Trustee, in its capacity as the trustee of Sinopharm Fund and for the benefit of Sinopharm Fund, conditionally agreed to subscribe for, the Sinopharm Shares at the Issue Price of HK$3.10 per Sinopharm Share.

The Sinopharm Subscription constitutes a connected transaction for the Company under the Listing Rules and is subject to the approval of the Independent Shareholders at the EGM. The Sinopharm Shares will be issued under a specific mandate to be sought for approval by the Independent Shareholders at the EGM.

– 5 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) details of the Sinopharm Subscription Agreement; (ii) the recommendation of the Independent Board Committee regarding the Sinopharm Subscription; (iii) the advice from Guotai Junan to the Independent Board Committee and the Independent Shareholders regarding the Sinopharm Subscription; and (iv) the notice of the EGM.

THE SINOPHARM SUBSCRIPTION AGREEMENT

Date

23 May 2013

Parties

(i) the Company, as issuer; and
(ii) Sinopharm Fund Trustee, as subscriber.

Sinopharm Fund Trustee, the trustee of Sinopharm Fund, is a company established in the PRC and is principally engaged in fund trust, management of investment funds and provision of various financial services. Sinopharm Fund Trustee is ultimately and beneficially owned by Baosteel Group Corporation, which is a state-owned enterprise principally engaged in the production of iron and steel products in the PRC. Pursuant to the terms and conditions of the Trust Agreement, Sinopharm Fund Trustee shall conditionally subscribe for the Sinopharm Shares in accordance with the Sinopharm Subscription Agreement for the benefit of Sinopharm Fund using its status as a Qualified Domestic Institutional Investor under the PRC foreign exchange regulations. Sinopharm Fund is a limited partnership established under the PRC laws for the purpose of making investments in the pharmaceutical and health care industry. Sinopharm Fund is managed by its general partner, namely 國藥集團資本管理有限公司 (Sinopharm Capital Management Company Limited*), which is owned as to 35% by CNPGC and 65% by an independent third party. CNPGC is the largest state-owned pharmaceutical and healthcare group in the PRC and its core businesses are pharmaceutical distribution, pharmaceutical scientific research and manufacture of medical and biotech products. CNPGC is the ultimate holding company of Sinopharm and the Company. Sinopharm and its related parties hold an aggregate of 9.7% interest in Sinopharm Fund. As at the Latest Practicable Date, Sinopharm was the controlling Shareholder holding 1,016,023,044 Shares, representing approximately 50.59% of the issued share capital of the Company. Sinopharm Fund Trustee is therefore a connected person of the Company.

The Sinopharm Subscription

– 6 –

LETTER FROM THE BOARD

Sinopharm Shares

As at the Latest Practicable Date, the Company had 2,008,410,807 Shares in issue. Assuming that there is no change in the issued share capital of the Company other than the allotment and issue of the Sinopharm Shares since the Latest Practicable Date up to the date of completion of the Sinopharm Subscription, the 125,000,000 Sinopharm Shares represent approximately (i) 6.22% of the existing issued share capital of the Company; and (ii) 5.86% of the issued share capital of the Company as enlarged by the allotment and issue of the Sinopharm Shares.

The aggregate nominal value of the Sinopharm Shares will be HK$12,500,000. The Sinopharm Shares shall rank pari passu in all respects among themselves and with all other Shares in issue as at the date of their allotment and issue.

The Sinopharm Shares will be allotted and issued under a specific mandate to be sought for approval from the Independent Shareholders at the EGM. Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Sinopharm Shares.

Issue Price

The Issue Price of HK$3.10 per Sinopharm Share represents:

(i) a discount of approximately 20.5% to the closing price of HK$3.90 per Share as quoted on the Stock Exchange on the Latest Practicable Date;
(ii) a discount of approximately 19.1% to the closing price of HK$3.83 per Share as quoted on the Stock Exchange on the Last Trading Day;
(iii) a discount of approximately 18.4% to the average of the closing prices as quoted on the Stock Exchange for the last five consecutive full trading days up to and including the Last Trading Day of approximately HK$3.80 per Share;
(iv) a discount of approximately 9.4% to the average of the closing prices as quoted on the Stock Exchange for the last 30 consecutive full trading days up to and including the Last Trading Day of approximately HK$3.42 per Share; and
(v) a premium of approximately 443.9% over the audited consolidated net asset value of the Group attributable to the Shareholders as at 31 December 2012 of approximately HK$0.57 per Share.

– 7 –

LETTER FROM THE BOARD

Conditions precedent

Completion of the Sinopharm Subscription is conditional upon the fulfilment or waiver (as the case may be) of the following conditions:

(i) the Company having obtained all necessary approvals and consents for the Sinopharm Subscription from the Stock Exchange and/or other regulatory authorities in Hong Kong, including but not limited to the approval for the issue of the circular in relation to the Sinopharm Subscription by the Stock Exchange;
(ii) the granting of the approval for listing of, and permission to deal in, the Sinopharm Shares by the Listing Committee of the Stock Exchange;
(iii) the resolution(s) approving the Sinopharm Subscription having been passed by the Independent Shareholders at the EGM; and
(iv) all representations, warranties and undertakings given or made by each of Sinopharm Fund Trustee and the Company as set out in the Sinopharm Subscription Agreement remaining true and accurate in all material respects on the date of completion of the Sinopharm Subscription.

The Company may at any time waive the condition referred to in (iv) above by written notice to Sinopharm Fund Trustee. The Company does not intend to waive such condition, but may consider waiving any breach of the condition which does not have any material adverse consequences depending on the actual circumstances at that time.

Completion

The Company shall serve a written notice to Sinopharm Fund Trustee to request for completion of the Sinopharm Subscription when all of the conditions precedent as set out above have been fulfilled or waived (as the case may be). Completion of the Sinopharm Subscription shall then take place on the sixth Business Days following the issue of such written notice. The Sinopharm Subscription is expected to be completed in early July 2013.

REASONS FOR THE SINOPHARM SUBSCRIPTION

The principal business activities of the Group are the manufacture and sale of traditional Chinese medicine and pharmaceutical products in the PRC with focuses on respiratory system drugs, nasal preparations, cerebro-cardiovascular drugs, and rheumatic diseases and bone injury drugs.

On 23 May 2013, the Company, Mr. Wang Xiaochun, Hanmax Investment Limited (“Hanmax”) and Fosun Industrial Co., Limited (“Fosun”) entered into the Acquisition Agreement pursuant to which the Company conditionally agreed to acquire, and Hanmax and Fosun conditionally agreed to sell, the entire issued share capital of Tongjitang Chinese Medicine Company for the total consideration which is equal to the Hong Kong dollar equivalent of RMB2,640 million, but in any event not less than HK$3,200 million and not more than HK$3,400 million. The total consideration will be settled by way of (i) allotment and issue of 334,000,000 new Shares to Hanmax (or any nominee(s) as it may direct); (ii)

– 8 –

LETTER FROM THE BOARD

the Company assuming the debt owed by Hanmax to Unisources Enterprises Limited in the amount of approximately RMB274.4 million; (iii) cash payable by the Company to Hanmax; and (iv) cash payable by the Company to Fosun.

On the same date, the Company also entered into a subscription agreement with Mr. Yang pursuant to which the Company conditionally agreed to allot and issue, and Mr. Yang conditionally agreed to subscribe for, 66,488,379 new Shares at an issue price of HK$3.10 per Share.

On the same date, the Company also entered into a placing agreement with three placing agents in relation to a placing, on a best effort basis, of up to a total of 225,000,000 new Shares at an issue price of HK$3.10 per Share. The placing was completed on 4 June 2013 and a total of 225,000,000 new Shares were successfully placed to not less than six placees who are third parties independent of the Company and its connected persons.

Further details of the Acquisition, the aforesaid subscription and the aforesaid placing are set out in the Announcement.

Based on the 125,000,000 Sinopharm Shares to be allotted and issued to Sinopharm Fund Trustee at the Issue Price of HK$3.10 per Sinopharm Share and the estimated expenses incidental to the Sinopharm Subscription to be borne by the Group of approximately HK$2.7 million, the gross proceeds and net proceeds from the Sinopharm Subscription will be HK$387.5 million and approximately HK$384.8 million respectively. Based on the aforesaid net proceeds receivable by the Company under the Sinopharm Subscription, the net price per Sinopharm Share to the Group is approximately HK$3.08. The Company intends to apply the net proceeds from the Sinopharm Subscription, the aforesaid subscription and the aforesaid placing to fund the cash portion of the consideration of the Acquisition (if it is completed).

Other than the Sinopharm Subscription, the Directors have also considered and compared feasibilities of other financing methods such as debt financing, rights issue and open offer of the Company. However, the Directors are of the view that such financing methods are more costly as compared to the Sinopharm Subscription. Based on the above and in view of the current market conditions and to maintain the public float in the Shares following the Acquisition, the Directors consider that the Sinopharm Subscription is an appropriate and preferred means of funding any potential investments by the Company, including the cash portion of the consideration of the Acquisition (if it is completed). Completion of the Sinopharm Subscription is not conditional on completion of the Acquisition, or vice versa.

The Directors have been reviewing potential investment opportunities for the Group from time to time, particularly in companies which are engaged in the traditional Chinese medicine industry in the PRC. In assessing potential investment opportunities, the Directors will take into consideration, among other things, types of products, scale of operation, brand and market position and geographical coverage of the target, size of the investment and potential synergistic effect with the Group.

– 9 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, the Company had no agreement, arrangement, understanding, intention or negotiation with any party (concluded or otherwise) about any investments other than the Acquisition. In the event that the Acquisition does not proceed, the Company will deposit the net proceeds from the Sinopharm Subscription in licensed financial institutions in Hong Kong and pursue other investment opportunities based on the aforesaid factors and use the proceeds from the Sinopharm Subscription to finance these investments if the Directors consider appropriate.

SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) immediately after allotment and issue of the Sinopharm Shares (assuming that there is no change in the issued share capital of the Company other than the allotment and issue of the Sinopharm Shares since the Latest Practicable Date up to the date of completion of the Sinopharm Subscription):

Sinopharm Sinopharm Fund Trustee (Note 1) Profit Channel Development Limited (Note 2) Public Shareholders Total:	As at the Latest Practicable Date No. of Shares % 1,016,023,044 50.59 – – 267,511,621 13.32 724,876,142 36.09 2,008,410,807 100.00	Immediately after allotment and issue of the Sinopharm Shares No. of Shares % 1,016,023,044 47.62 125,000,000 5.86 267,511,621 12.54 724,876,142 33.98 2,133,410,807 100.00	Immediately after allotment and issue of the Sinopharm Shares No. of Shares % 1,016,023,044 47.62 125,000,000 5.86 267,511,621 12.54 724,876,142 33.98 2,133,410,807 100.00
			100.00

Notes:

Pursuant to the Sinopharm Subscription Agreement, Sinopharm Fund Trustee agreed to subscribe for the Sinopharm Shares for the benefit of Sinopharm Fund.
Profit Channel Development Limited is wholly owned by Mr. Yang.

– 10 –

LETTER FROM THE BOARD

EQUITY FUND-RAISING ACTIVITIES IN PAST TWELVE MONTHS

The Company has conducted the following fund raising activities in the past twelve months before the Latest Practicable Date:

Date of	Fund raising		Intended use of	Actual use of
announcement	activity	Net proceeds	proceeds	proceeds
24 May 2013	Best effort	Approximately	To fund potential	As intended
	placing of up to	HK$689.4	investments
	225,000,000	million	including the
	new Shares		Acquisition if it
			is completed
24 May 2013	Subscription of	Approximately	To fund potential	The subscription
	66,488,379 new	HK$205.7	investments	has yet to be
	Shares by Mr.	million	including the	completed
	Yang		Acquisition if it
			is completed

Save as disclosed above, the Company has not conducted any equity fund-raising activities in the past twelve months before the Latest Practicable Date.

LISTING RULES IMPLICATIONS

Sinopharm Fund Trustee is the trustee of Sinopharm Fund. The general partner of Sinopharm Fund is an associate of Sinopharm which is the controlling Shareholder. Sinopharm Fund Trustee is therefore a connected person of the Company. Accordingly, the Sinopharm Subscription constitutes a connected transaction of the Company under the Listing Rules and is subject to the independent shareholders’ approval requirements of the Listing Rules.

The EGM will be convened by the Company at which an ordinary resolution will be proposed to seek approval from the Independent Shareholders by way of poll for the Sinopharm Subscription, including the grant of the specific mandate for the issue of the Sinopharm Shares. Sinopharm and its associates shall abstain from voting at the EGM in respect of the resolution approving the Sinopharm Subscription. As at the Latest Practicable Date, Sinopharm and its associates were interested in 1,016,023,044 Shares (representing approximately 50.59% of the issued share capital of the Company).

The Independent Board Committee has been established to advise the Independent Shareholders on the Sinopharm Subscription. The Independent Board Committee consists of Mr. Fang Shuting, an independent non-executive Director, only as the other independent non-executive Directors, namely Mr. Zhou Bajun and Mr. Xie Rong, are deemed to have a material interest in the Sinopharm Subscription as they are both also independent non-executive directors of Sinopharm Group Co. Ltd (a subsidiary of CNPGC). Mr. Zhou Bajun and Mr. Xie Rong abstained from voting on the Board resolution approving the

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LETTER FROM THE BOARD

Sinopharm Subscription. Guotai Junan has been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders on the Sinopharm Subscription.

EGM

A notice convening the EGM to be held at Conference Room, 1st Floor, No. 2 Rong Gui Qiao Xi Road, Shunde District, Foshan City, Guangdong Province, the PRC on Wednesday, 3 July 2013 at 10:30 a.m. is set out on pages 37 and 38 of this circular. A form of proxy for use by the Shareholders at the EGM is enclosed. Whether or not you intend to attend the EGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the registered office of the Company at Rooms 2801-2805, China Insurance Group Building, 141 Des Voeux Road Central, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the EGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment of it, if you so wish.

RECOMMENDATION

The Directors (excluding the independent non-executive Directors) are of the view that the Sinopharm Subscription Agreement was entered into on normal commercial terms which are fair and reasonable and the Sinopharm Subscription is in the interests of the Company and the Shareholders as a whole, and accordingly recommend the Shareholders to vote in favour of the resolution in this regard to be proposed at the EGM.

The Independent Board Committee, having taken into account the advice of Guotai Junan, considers that the Sinopharm Subscription Agreement was entered into on normal commercial terms which are fair and reasonable, and the Sinopharm Subscription and the allotment and issue of the Sinopharm Shares are in the interests of the Company and the Shareholders as a whole. Accordingly, Guotai Junan advised the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution in this regard to be proposed at the EGM.

Your attention is drawn to the letter from the Independent Board Committee set out on page 13 of this circular which contains its recommendation to the Independent Shareholders and the letter of advice from Guotai Junan set out on pages 14 to 31 of this circular containing its advice to the Independent Board Committee and the Independent Shareholders on the Sinopharm Subscription.

By order of the Board Winteam Pharmaceutical Group Limited Wu Xian Chairman

– 12 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 570)

14 June 2013

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY SINOPHARM FUND TRUSTEE UNDER SPECIFIC MANDATE

I have been appointed as the Independent Board Committee to advise the Independent Shareholders in respect of the Sinopharm Subscription, details of which are set out in the letter from the Board contained in the circular of the Company (the “Circular”) dated 14 June 2013. Unless the context otherwise requires, terms defined in the Circular shall have the same meanings when used in this letter.

I wish to draw your attention to the letter from the Board on pages 5 to 12 of the Circular and the letter from Guotai Junan to the Independent Board Committee and the Independent Shareholders containing its advice on the Sinopharm Subscription on pages 14 to 31 of the Circular.

Having taken into account the advice of, and the principal factors and reasons considered by Guotai Junan in relation to the Sinopharm Subscription as stated in its letter, I consider that the Sinopharm Subscription Agreement was entered into on normal commercial terms which are fair and reasonable, and the Sinopharm Subscription and the allotment and issue of the Sinopharm Shares are in the interests of the Company and the Shareholders as a whole. Accordingly, I recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Sinopharm Subscription and the allotment and issue of the Sinopharm Shares.

Yours faithfully, For and on behalf of Independent Board Committee FANG Shuting

Independent Non-executive Director

– 13 –

LETTER FROM GUOTAI JUNAN

Set out below is the text of a letter received from Guotai Junan to the Independent Board Committee and the Independent Shareholders regarding the Sinopharm Subscription for the purpose of inclusion in this circular.

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28/F., Low Block, Grand Millennium Plaza, 181 Queen’s Road Central, Hong Kong

14 June 2013

To the Independent Board Committee and the Independent Shareholders,

Dear Sirs,

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY SINOPHARM FUND TRUSTEE UNDER SPECIFIC MANDATE

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders regarding the Sinopharm Subscription, details of which are set out in the letter from the Board contained in the circular issued by the Company to the Shareholders dated 14 June 2013 (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 otherwise requires.

– 14 –

LETTER FROM GUOTAI JUNAN

directors of Sinopharm Group Co. Ltd (a subsidiary of CNPGC). Mr. Zhou Bajun and Mr. Xie Rong abstained from voting on the Board resolution approving the Sinopharm Subscription.

BASIS OF OUR OPINION

In formulating our advice, we consider that we have reviewed sufficient and relevant information and documents and have taken reasonable steps as required under Rule 13.80 of the Listing Rules to reach an informed view and to provide a reasonable basis for our advice. We have relied on the information, statements, opinion and representations contained or referred to in the Circular and all information and representations which 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 at the date hereof. We have also assumed that all statements of belief, opinion and intention of the Directors as set out in the letter from the Board contained in the Circular were reasonably made after due and careful inquiry. We have also sought and obtained confirmation from the Company that no material facts have been omitted from the information provided and referred to in the Circular.

The Directors have confirmed to us that no material facts have been omitted from the information supplied and opinion expressed. We have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular or the reasonableness of the opinions and representations provided to us by the Directors, management of the Company and its subsidiaries. We have no reason to doubt the truth, accuracy and completeness of the information, facts, opinions and representations provided to us by the Directors, management of the Company and its subsidiaries. We have relied on such information and opinions and have not, however, conducted any independent verification of the information provided, nor have we carried out any independent investigation into the business, financial conditions and affairs of the Group or its future prospect. Our review and analysis were based upon, among others, the information provided by the Company including the annual reports of the Company for each of the financial years ended 31 December 2012 (the “2012 Annual Report”), 31 December 2011 (the “2011 Annual Report”) and 31 December 2010 (the “2010 Annual Report”), the Circular and certain published information of the Group.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our advice with regard to the Sinopharm Subscription, we have taken into consideration the following factors and reasons:

i. Business and financial information of the Company

The Company is an investment holding company incorporated in Hong Kong with limited liability and through its subsidiaries is principally engaged in the production and sale of Chinese medicine and pharmaceutical products in the PRC.

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LETTER FROM GUOTAI JUNAN

The Group commenced engaging in the pharmaceutical business since late 2006. In the past six years, the Group has delivered satisfactory results and has developed a number of well-known Traditional Chinese Medicine (“TCM”) brand names (e.g. Dezhong, Foshan and Feng Liao Xing). According to the 2012 Annual Report, the Group has a total of 327 products and 465 product specifications, 28 of which are national exclusive products, while three are State’s protected TCM.

A summary of the financial information of the Group are set out below as extracted from the 2012 Annual Report, the 2011 Annual Report and the 2010 Annual Report.

Turnover Gross profit Gross profit margin Profit for the year Profit margin Profit for the year attributable to equity Shareholders	For the year ended 31 December 2012 2011 2010 (Audited) (Audited) (Audited) HK$’000 HK$’000 HK$’000 1,268,143 1,015,935 939,178 693,228 548,406 523,904 54.66% 53.98% 55.78% 212,654 73,708 86,079 16.77% 7.26% 9.17% 207,134 72,072 60,925	For the year ended 31 December 2012 2011 2010 (Audited) (Audited) (Audited) HK$’000 HK$’000 HK$’000 1,268,143 1,015,935 939,178 693,228 548,406 523,904 54.66% 53.98% 55.78% 212,654 73,708 86,079 16.77% 7.26% 9.17% 207,134 72,072 60,925

		523,904 55.78% 86,079 9.17% 60,925

2011 compared to 2010

As stated in the 2011 Annual Report, the Group recorded an increase in turnover from approximately HK$939.18 million in the year 2010 to approximately HK$1,015.94 million in the year 2011 (representing an increase of approximately 8.17%). The increase in turnover was mainly attributable to the Group’s successful strategy in expanding product coverage in primary health care institutions and formation of partnerships with strategic distributors and drug chains to increase the Group’s over-the-counter (the “OTC”) retail market coverage and penetration.

In November 2011, the Group completed the acquisition of 100% equity interest in Foshan Nanhai Yikang Pharmaceutical Co., Ltd. (currently known as Foshan Winteam Pharmaceutical Sales Company Limited, the “Foshan Winteam”). Foshan Winteam is principally engaged in wholesale of Chinese herbal medicine tablets, Chinese patent medicine, chemical medicine, antibiotic medicine, biochemical medicine, biological products (other than vaccine), protein anabolic agents, peptide hormones; wholesale of medical devices; wholesales of health food; wholesale and retail of pre-packaged foodstuffs; sale of disinfection supplies, cosmetics, daily necessities and health appliances. The acquisition of Foshan Winteam allowed the Group to make use of Foshan Winteam as an integrated sales platform for the major products manufactured by the various subsidiaries of the Group.

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LETTER FROM GUOTAI JUNAN

However, the Group’s gross profit margin decreased slightly from approximately 55.78% in 2010 to approximately 53.98% in 2011, due to the price hike in TCM materials which exerted pressure on the cost of sales. As a result, the profit for the year attributable to equity Shareholders increased from approximately HK$60.93 million in the year 2010 to approximately HK$72.07 million in the year 2011 (representing an increase of approximately 18.28%), mainly because of the successful acquisition of additional equity interests in Foshan Dezhong Pharmaceutical Co., Ltd. and Foshan Feng Liao Xing Pharmaceutical Co., Ltd. and hence leading to the consolidation of the results of these companies.

2012 compared to 2011

As stated in the 2012 Annual Report, the Group recorded an increase in turnover from approximately HK$1,015.94 million in the year 2011 to approximately HK$ 1,268.14 million in the year 2012 (representing an increase of approximately 24.8%). It was mainly attributable to the Group’s successful expansion of product coverage in primary health care institutions, as well as the partnerships established with major chain pharmacies which have increased the coverage of the Group in the OTC retail market, resulting in the satisfactory growth of the core products of the Group (such as Yu Ping Feng Granule（玉屏風顆粒）and Bi Yan Kang Tablet（鼻炎康片）. In addition, the business of Foshan Winteam, which was acquired by the Group at the end of 2011, also contributed to the increase in the turnover of the Group directly. The Group’s gross profit margin slightly increased from approximately 53.98% in 2011 to approximately 54.66% in 2012. The profit for the year attributable to equity Shareholders increased from approximately HK$72.07 million in the year 2011 to approximately HK$207.13 million in the year 2012 (representing an increase of approximately 187.4%) was mainly due to the growth in turnover, as well as the effective reinforcement of operating cost control, during the year 2012. The Group enhanced control over sales costs reducing advertising and promotion and traveling expenses by 23.4% from approximately HK$221.1 million in year 2011 to approximately HK$169.3 million in year 2012, and other sales and distribution costs by 33.4% from approximately HK$31.2 million in 2011 to approximately HK$21.4 million in 2012, resulting in an overall decrease in sales and distribution costs of 11.9% as compared to the year 2011.

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LETTER FROM GUOTAI JUNAN

Set out below is a summary of consolidated statement of financial position of the Group as at 31 December 2010, 2011 and 2012, as extracted from the annual reports of the Company of the relevant period.

Consolidated assets and liabilities Total non-current assets Total current assets Total current liabilities Total non-current liabilities Non-controlling interests Total equity attributable to equity Shareholders	As at 31 December 2012 2011 2010 (Audited) (Audited) (Audited) HK$’000 HK$’000 HK$’000 912,308 913,238 813,811 1,004,512 709,510 592,365 (800,722) (596,849) (489,089) (73,007) (61,584) (67,903) (21,059) (15,577) (13,525) 1,022,032 948,738 835,659

As at 31 December 2012, the consolidated net asset value of the Group attributable to the equity Shareholders amounted to approximately HK$1,022.03 million, representing an increase of approximately 7.73% from HK$948.73 million as at 31 December 2011. As at 31 December 2012, total assets amounted to approximately HK$1,916.82 million. Non-current assets amounted to approximately HK$912.31 million as at 31 December 2012, primarily consisted of fixed assets and construction in progress of approximately HK$559.76 million (representing the production facilities of the Group); intangible assets of approximately HK$90.89 million (representing production rights, trademarks, distribution network and customer relationship); and goodwill of approximately HK$208.64 million (as arisen from the various acquisitions of equity interests in a number of subsidiaries of the Group). Current assets, on the other hand, amounted to approximately HK$1,004.51 million as at 31 December 2012, primarily consisted of trade and other receivables of approximately HK$546.09 million; inventories of approximately HK$198.61 million; and other financial assets (representing available-for-sale equity securities (including securities listed in the PRC and unlisted equity securities)) of approximately HK$94.69 million.

As at 31 December 2012, total liabilities amounted to approximately HK$873.73 million. Non-current liabilities comprised of deferred tax liabilities and deferred government grants of approximately HK$55.27 million and approximately HK$17.74 million, respectively. Current liabilities mainly consisted of bank loans of HK$511.10 million and trade and other payables of HK$253.83 million, respectively.

ii. Information on Sinopharm Fund Trustee

According to the letter from the Board, Sinopharm Fund Trustee, the trustee of Sinopharm Fund, is a company established in the PRC and is principally engaged in fund trust, management of investment funds and provision of various financial services. Sinopharm Fund Trustee is ultimately and beneficially owned by Baosteel Group

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LETTER FROM GUOTAI JUNAN

Corporation, which is a state-owned enterprise principally engaged in the production of iron and steel products in the PRC. Pursuant to the terms and conditions of the Trust Agreement, Sinopharm Fund Trustee shall conditionally subscribe for the Sinopharm Shares in accordance with the Sinopharm Subscription Agreement for the benefit of Sinopharm Fund using its status as a Qualified Domestic Institutional Investor under the PRC foreign exchange regulations. Sinopharm Fund is a limited partnership established under the PRC laws for the purpose of making investments in the pharmaceutical and health care industry. Sinopharm Fund is managed by its general partner, namely Sinopharm Capital Management Company Limited*（國藥集團資本管理有限公司）, which is owned as to 35% by CNPGC and 65% by an independent third party. CNPGC is the largest state-owned pharmaceutical and healthcare group in the PRC and its core businesses are pharmaceutical distribution, pharmaceutical scientific research and manufacture of medical and biotech products. CNPGC is the ultimate holding company of Sinopharm and the Company. Sinopharm and its related parties hold an aggregate of 9.7% interest in Sinopharm Fund. As at the Latest Practicable Date, Sinopharm was the controlling Shareholder holding 1,016,023,044 Shares, representing approximately 50.59% of the issued share capital of the Company. Sinopharm Fund Trustee is therefore a connected person of the Company.

iii. Reasons for and benefits of the Sinopharm Subscription

As disclosed in the letter from the Board, the principal business activities of the Group are the manufacture and sale of TCM and pharmaceutical products in the PRC with focuses on respiratory system drugs, nasal preparations, cerebro-cardiovascular drugs, and rheumatic diseases and bone injury drugs.

On 23 May 2013, the Company also entered into a subscription agreement with Mr. Yang pursuant to which the Company conditionally agreed to allot and issue, and Mr. Yang conditionally agreed to subscribe for, 66,488,379 new Shares at an issue price of HK$3.10 per Share.

On 23 May 2013, the Company also entered into a placing agreement with three placing agents in relation to a placing, on a best effort basis, of up to a total of 225,000,000 new Shares at an issue price of HK$3.10 per Share. The placing was

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LETTER FROM GUOTAI JUNAN

completed on 4 June 2013 and a total of 225,000,000 new Shares were successfully placed to not less than six placees who are third parties independent of the Company and its connected persons.

Further details of the Acquisition, the aforesaid subscription and the aforesaid placing are set out in the Announcement.

Based on the 125,000,000 Sinopharm Shares to be allotted and issued to Sinopharm Fund Trustee at the Issue Price of HK$3.10 per Sinopharm Share and the estimated expenses incidental to the Sinopharm Subscription to be borne by the Group of approximately HK$2.7 million, it is expected that the gross proceeds and net proceeds from the Sinopharm Subscription will be HK$387.5 million and approximately HK$384.8 million respectively. Based on the aforesaid net proceeds receivable by the Company under the Sinopharm Subscription, the net price per Sinopharm Share to the Group is approximately HK$3.08. The Company intends to apply the net proceeds from the Sinopharm Subscription, the aforesaid subscription and the aforesaid placing to fund the cash portion of the consideration of the Acquisition (if it is completed).

As stated in the letter from the Board, other than the Sinopharm Subscription, the Directors have also considered and compared feasibilities of other financing methods such as debt financing, rights issue and open offer of the Company. However, the Directors are of the view that such financing methods are more costly as compared to the Sinopharm Subscription. As such, the Directors are of the view that the Sinopharm Subscription is an appropriate means of fund raising. Based on the above and in view of the current market conditions and to maintain the public float in the Shares following the Acquisition, the Directors consider that the Sinopharm Subscription is an appropriate and preferred means of funding any potential investments by the Company, including the cash portion of the consideration of the Acquisition (should the Acquisition proceed to completion). However, the completion of the Sinopharm Subscription is not conditional on completion of the Acquisition, or vice versa.

As stated in the letter from the Board, in the event that the Acquisition does not proceed, the Company will deposit the net proceeds from the Sinopharm Subscription in licensed financial institutions in Hong Kong and pursue other investment opportunities and use the proceeds from the Sinopharm Subscription to finance these investments if the Directors consider appropriate. The Directors have been reviewing potential investment opportunities for the Group from time to time, particularly in companies which are engaged in the TCM industry in the PRC. In assessing potential investment opportunities, the Directors will take into consideration, among other things, types of products, scale of operation, brand and market position and geographical coverage of the target, size of the investment and potential synergistic effect with the Group. The Directors confirmed that, as at the Latest Practicable Date, the Company had no agreement, arrangement, understanding, intention or negotiation with any party (concluded or otherwise) about any investments other than the Acquisition.

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LETTER FROM GUOTAI JUNAN

Taking into consideration the above and (i) the reasons for and benefits of the Acquisition as stated in the Announcement; (ii) strengthening of cash position for the upcoming potential investment without incurring additional interests expense or commission and size of the funding requirements for the Acquisition (if it is completed); (iii) potential investment opportunities arise from time to time; and (iv) the continuing support from the controlling Shareholders building up investors’ confidence, we agree with the Directors’ view that the Sinopharm Subscription is a more feasible and beneficial way of fund raising available and applicable to the Group and is in the interests of both the Company and the Shareholders as a whole.

iv. Principal terms of the Sinopharm Subscription Agreement

Pursuant to the Sinopharm Subscription Agreement, the Company conditionally agreed to allot and issue, and Sinopharm Fund Trustee, in its capacity as the trustee of Sinopharm Fund and for the benefit of Sinopharm Fund, conditionally agreed to subscribe for 125,000,000 Sinopharm Shares at the Issue Price of HK$3.10 per Sinopharm Share. As at the Latest Practicable Date, the Company had 2,008,410,807 Shares in issue. Assuming that there is no change in the issued share capital of the Company other than the allotment and issue of the Sinopharm Shares since the Latest Practicable Date up to the date of completion of the Sinopharm Subscription, the 125,000,000 Sinopharm Shares represent approximately (i) 6.22% of the existing issued share capital of the Company; and (ii) 5.86% of the issued share capital of the Company as enlarged by the allotment and issue of the Sinopharm Shares.

The Sinopharm Shares shall rank pari passu in all respects among themselves and with all other Shares in issue as at the date of their allotment and issue.

The Issue Price of HK$3.10 per Sinopharm Share represents:

i. a discount of approximately 20.5% over/to the closing price of HK$3.90 per Share as quoted on the Stock Exchange on the Latest Practicable Date;
ii. a discount of approximately 19.1% to the closing price of HK$3.83 per Share as quoted on the Stock Exchange on the Last Trading Day;
iii. a discount of approximately 18.4% to the average of the closing prices as quoted on the Stock Exchange for the last five consecutive full trading days up to and including the Last Trading Day of approximately HK$3.80 per Share;
iv. a discount of approximately 9.4% to the average of the closing prices as quoted on the Stock Exchange for the last 30 consecutive full trading days up to and including the Last Trading Day of approximately HK$3.42 per Share; and
v. a premium of approximately 443.9% over the audited consolidated net asset value of the Group attributable to the Shareholders as at 31 December 2012 of approximately HK$0.57 per Share.

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LETTER FROM GUOTAI JUNAN

The Issue Price was determined after arm’s length negotiations between the Company and Sinopharm Fund Trustee with reference to, among other things, the recent market price of the Shares and the audited consolidated net asset value of the Group attributable to the Shareholders as at 31 December 2012 of approximately HK$0.57 per Share. The Issue Price of HK$3.10 is the same as the issue price of the placing Shares to independent third parties pursuant to the placing agreement as set out in the Announcement.

In assessing the reasonableness of the Issue Price, we have reviewed the closing price level of the Shares traded on the Stock Exchange during the last twelve months preceding the date of the Sinopharm Subscription Agreement up to the Latest Practicable Date (the “Review Period”).

(a) Review on Share prices performance

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5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
HK$
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Source: The website of the Stock Exchange (www.hkex.com.hk)

Note: Trading in the Shares was suspended on 31 August 2012 and from 13 May 2013 to 24 May 2013 (both days inclusive).

During the Review Period, the highest closing price and the lowest closing price of the Shares were HK$4.63 on 30 May 2013 and HK$1.26 on 29 June 2012, respectively. We noted that, the Share price surged sharply since the beginning of March 2013 and reached the highest of HK$4.63 on 30 May 2013, representing a premium of 49.35% over the Issue Price.

On 28 February 2013, an announcement in relation to, amongst other thing, close of the voluntary conditional cash offer by Citi Group Global Markets Asia Limited for and on behalf of Sinopharm for all the issued Shares in the Company was published. Following the issue of the aforesaid announcement, the closing Share price increased from HK$2.05 on 1 March 2013 to HK$2.23 on 4 March 2013. We noted that the closing price of the Shares were below HK$2.00,

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LETTER FROM GUOTAI JUNAN

representing approximately 35.48% discount to the Issue Price, for approximately 76.40% of the trading days during the Review Period. HK$2.00 was the mid-point of the closing prices on 28 February 2013 and 1 March 2013.

Immediately following the release of the Announcement on 24 May 2013, the closing price of the Shares suddenly surged to approximately HK$4.34, possibly caused by the stimulation following the announcement of, amongst other things, the Acquisition and the Sinopharm Subscription. It is reasonable to infer that the sudden upsurge of market interest in the Shares is mainly attributable to the Announcement and hence may not be sustainable in the long run. Therefore we believe the 12-month Review Period can provide a more comprehensive picture to assess the reasonableness of the Issue Price.

We note from the above that the Issue Price is within the historical closing price range of the Shares and higher than the majority of the closing prices of the Shares during the Review Period.

(b) Comparable Analyses

In order to assess the fairness and reasonableness of the Issue Price, to the best of our knowledge, we have looked into eight companies listed on the Main Board and Growth Enterprise Market of the Stock Exchange (the “ Share Comparables ”) which (i) have made announcements for connected transactions of share issues and would be listed on the Stock Exchange from 25 November 2012 up to and including 23 May 2013, being the date of the Sinopharm Subscription Agreement, and (ii) had the market capitalization higher than HK$500 million for reference, which we consider to be an exhaustive sample. In view that (i) the terms of the Share Comparables are determined under similar market conditions and sentiments as the Sinopharm Subscription and (ii) the Sinopharm Shares will be issued to connected persons to the Company, we consider the Share Comparables are fair and representative samples.

					Premium/
				Premium/	(discount) of
			Premium/	(discount) of	the issue
			(discount) of	the issue	price over/
			the issue	price over/	(to) the
			price over/	(to) the 5-day	10-day
			(to) the	average	average
			closing price	closing price	closing price
Date of	Share Comparable	Market	on the last	on the last	on the last
announcement	(stock code)	Capitalization	trading day	trading day	trading day
		(HK$ million)	(%)	(%)	(%)
25 November	Hybrid Kinetic Group	926.5	(9.91)	(9.91)	(2.72)
2012	Limited (1188)
17 January	IRC Limited (1029)	3,923.5	(33.80)	(27.20)	(25.30)
2013

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LETTER FROM GUOTAI JUNAN

					Premium/
				Premium/	(discount) of
			Premium/	(discount) of	the issue
			(discount) of	the issue	price over/
			the issue	price over/	(to) the
			price over/	(to) the 5-day	10-day
			(to) the	average	average
			closing price	closing price	closing price
Date of	Share Comparable	Market	on the last	on the last	on the last
announcement	(stock code)	Capitalization	trading day	trading day	trading day
		(HK$ million)	(%)	(%)	(%)
23 January	China Gogreen Assets	1,334.6	(4.46)	(6.13)	6.37
2013	Investment Limited
	(397)
24 January	China Bio-Med	1,441.9	(1.20)	(2.94)	–
2013	Regeneration
	Technology Limited
	(8158)
14 February	Asia Coal Limited (835)	1,172.7	(82.46)	(83.24)	(0.89)
2013*
15 April	Hsin Chong Construction	1,130.1	(13.79)	(10.71)	5.45
2013	Group Limited (404)
26 April	Great China Properties	617.3	(18.67)	(19.95)	(2.09)
2013	Holdings Limited (21)
8 May 2013	SPG Land (Holdings)	9,470.7	(50.30)	(44.00)	(38.40)
	Limited (337)
	Minimum*		(50.30)	(44.00)	(38.40)
	Maximum*		(1.2)	(2.94)	6.37
	Mean*		(18.88)	(17.26)	(8.10)
	Company		(19.1)	(18.4)	(12.5)

Source: website of the Stock Exchange (www.hkex.com.hk)

According to the circular of Asia Coal Limited dated 8 February 2013, the Asia Coal Limited experienced default of convertible bonds and substantial loss and net liabilities. In order to safeguard the interests of the shareholders of Asia Coal Limited from risk of possible liquidation, the connected transactions of share issues at substantial discount was conducted to obtain financing for redemption of convertible bonds. Given it was an outlier, we excluded it from the industry data.

Based on the above illustration, the premium/discount represented by the issue price per share issued by respective Share Comparables to their respective closing prices on the last trading day ranged from a discount of approximately 1.2% to a discount of approximately 50.30% (the “ LTD Range ”). Upon comparison, we note that the discount of the Issue Price to the closing price on the Latest Trading Day falls within the LTD Range.

The premium/discount represented by the issue price per share issued by respective Share Comparables to their respective 5-day-average closing prices for the five consecutive trading days up to and including the last trading day ranged

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LETTER FROM GUOTAI JUNAN

from a discount of approximately 2.94% to a discount of approximately 44.00% (the “ 5-Day Range ”). Upon comparison, we note that the discount of the Issue Price to the 5-day-average closing price for the five consecutive trading days up to and including the Last Trading Day falls within the 5-Day Range.

The premium/discount represented by the issue price per share issued by respective Share Comparables to their respective 10-day-average closing prices for the ten consecutive trading days up to and including the last trading day ranged from a premium of approximately 6.37% to a discount of approximately 38.40% (the “ 10-Day Range ”). Upon comparison, we note that the discount of the Issue Price to the 10-day-average closing price for the ten consecutive trading days up to and including the Last Trading Day falls within the 10-Day Range.

However, as mentioned above, we consider the substantial increase in the closing prices of the Shares from HK$1.96 on 28 February 2013 to HK$3.83 on the Last Trading Date is event driven and may not be sustainable in the long run. Furthermore, we would like to highlight that during the Review Period, the closing prices of the Shares were below HK$2.00 for 191 trading days out of 250 trading days during the Review Period and the Issue Price represented premium of approximately 55.0% to HK$2.00.

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LETTER FROM GUOTAI JUNAN

(c) Review on trading liquidity of the Shares

For the purpose of assessing the trading liquidity of the Shares, the following table shows the daily trading volume of the Shares during the Review Period:

					Percentage	Percentage
					of average
						daily	Percentage
						turnover	of average
						over total		daily
					number of		turnover
						issued	over total
					Shares held		number of
		Highest		Average		by the	Shares in
	No. of	daily	Lowest daily	daily	public as at		issue as at
	trading days	turnover (in	turnover (in	turnover (in	the Latest		the	Latest
	in each	number of	number of	number of	Practicable		Practicable
Month	month	Shares)	Shares)	Shares)		Date		Date
						(Note 1)	(Note 2)
2012
June	21	1,724,000	24,000	517,905		0.07		0.03
July	21	5,092,000	–	853,714		0.12		0.04
August	22	6,280,000	200,000	1,447,545		0.20		0.07
September	20	21,928,000	254,000	3,226,100		0.45		0.16
October	20	2,956,000	188,000	1,119,088		0.15		0.06
November	22	5,392,000	150,000	1,475,604		0.20		0.07
December	19	9,658,000	264,000	1,427,680		0.20		0.07
2013
January	22	366,082,750	326,000	19,668,541		2.71		0.98
February	17	40,498,000	2,800,521	10,008,385		1.38		0.50
March	20	42,336,000	3,634,000	20,938,060		2.89		1.04
April	20	16,242,000	2,828,000	8,723,436		1.20		0.43
May	12	52,780,500	3,858,000	17,059,363		2.35		0.85
June	7	32,086,000	2,742,000	16,432,286		2.27		0.82

Source: The website of the Stock Exchange (www.hkex.com.hk)

Notes:

Based on 724,876,142 Shares held in public hands as at the Latest Practicable Date.
Based on 2,008,410,807 Shares in issue as at the Latest Practicable Date.

As illustrated in the table above, during the Review Period, we noted that the average daily trading volume of the Shares as a percentage of the average total number of Shares in issue ranged from approximately 0.03% to approximately 1.04% while the average daily trading volume of the Shares as a percentage of the average total number of the Shares held by the public ranged

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LETTER FROM GUOTAI JUNAN

from approximately 0.07% to approximately 2.89%. Based on the above, the trading volume of the Shares during the Review Period was very thin. Although it is noted that there had been an increase in trading volume to approximately 20.9 million Shares during March 2013 (which was the month immediately after the publication of the announcement in relation to, amongst other thing, close of voluntary conditional cash offer by Citi Group Global Markets Asia Limited for and on behalf of Sinopharm for all the issued Shares in the Company), save for the completion of the transaction of 354,898,750 Shares on 29 January 2013, trading volume reduced again subsequently during the period in April 2013 and up to the Latest Practicable Date to the similar level prior to publication of the Announcement

Immediately following the release of the Announcement in 24 May 2013, the trading volume suddenly surged to approximately 52.8 million Shares on 27 May 2013, possibly caused by the stimulation following the announcement in relation to, among other things, the Acquisition and the Sinopharm Subscription. Thereafter, the trading volume of the Shares reduced again subsequently up to the Latest Practicable Date to the level prior to publication of the Announcement. It is reasonable to infer that the sudden upsurge of market interest in the Shares is mainly attributable to the Announcement and hence may not be sustainable in the long run.

Based on the above, we therefore consider the trading of the Shares was relatively thin and inactive during the Review Period.

Taking into consideration of the aforementioned factors and reasons, we consider the terms of the Sinopharm Subscription are fair and reasonable, on normal commercial terms and in the interests of both the Company and the Shareholders as a whole.

v. Other alternative methods of financing

We have discussed with the management of the Company and noted that the management of the Company has prudently considered and compared feasibilities of other financing methods such as debt financing, right issue and open offer of the Company. However, the Directors are of the view that such financing methods are more costly as compared to the Sinopharm Subscription. According to the Announcement, the cash portion of the consideration of the Acquisition are expected to be financed by (i) the proceeds from the placing; (ii) the share subscriptions (including the Sinopharm Subscription); and (iii) a combination of internal resources and debt or equity financing transactions.

As disclosed in the letter from the Board, apart from share subscriptions (including the Sinopharm Subscription and the subscription by Mr. Yang as set out in the Announcement), on 23 May 2013, the Company has entered into a placing agreement with three placing agents in relation to a best effort placing of up to a total of 225,000,000 new Shares at an issue price of HK$3.10 per Share.

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LETTER FROM GUOTAI JUNAN

As stated in the Announcement, other than the aforesaid placing, the Sinopharm Subscription and the aforesaid subscription, the remaining balance of the cash portion of the Hanmax Consideration and the Fosun Consideration are expected to be financed by the Company’s internal resources and debt or equity financing transactions. As advised by the management of the Company, the composition of the financing is still subject to finalization. We have discussed with the management of the Company and noted that the Company has considered debt financing such as bank borrowings, convertible bonds and promissory notes. However, as compared with Sinopharm Subscription, other debt financing would incur financial costs such as interests which would higher than the cost of Sinopharm Subscription. We have reviewed the 2012 Annual Report and noted that the effective interest rate of the Group’s total borrowings at the end of 2012 was 6.75%. As stated in the letter from the Board, the estimated expenses incidental to the Sinopharm Subscription to be borne by the Group is approximately HK$2.7 million, representing approximately 0.70% of the gross proceeds of HK$387.5 million, which was lower than the Group’s effective interest rate as at the end of 2012. Therefore, the Directors are of the view, and we concur, that Sinopharm Subscription is a more cost-effective means of fund raising so as to minimize the total financial costs for the Acquisition.

The Directors note that a rights issue or an open offer of the Company will give an opportunity to all Shareholders to participate in the subscription for new Shares to be issued by the Company on a pro rata basis. However, the Directors consider that the Company would encounter difficulties in finding an independent underwriter in Hong Kong which is interested to underwrite a rights issue or open offer of the Company with reasonable underwriting fee. Furthermore, the Directors advised that in order to take up its entitlements in a rights issue or an open offer in Hong Kong, the controlling Shareholder will be subject to stringent approval from the relevant PRC government authority which will present higher uncertainties. As such, the Directors are of the view that rights issue or open offer may not be the appropriate mean for its fund raising exercise. The Directors confirmed that, up to the Latest Practicable Date, the Company has not attempted to engage an underwriter in relation to a rights issue or an open offer.

In addition, the Sinopharm Subscription demonstrates the recognition of the value of the Company and signifies the confidence of the controlling Shareholder in the existing and future development potentials of the Group. With the continuing support of the controlling Shareholder of the Company, this will ensure business stability and continuity of the Group which is crucial and beneficial to the long-term development of the Group.

In view of (i) a rights issue or open offer takes longer time to complete than the Sinopharm Subscription as the former would involve numerous steps including notice period for book closure, issue of prospectus and offer period under the prevailing Listing Rules; (ii) the potential substantial underwriting costs for a rights issue or open offer as compared to the Sinopharm Subscription; (iii) other debt financing methods would incur interests which would increase the financial costs to the Group; and (iv) the continuing support from the controlling Shareholders, we agree with the Directors’ view that the Sinopharm Subscription is a more feasible and beneficial way of fund

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LETTER FROM GUOTAI JUNAN

raising available and applicable to the Group on the basis that the Sinopharm Subscription is a more cost-effective means of fund raising as compared to a rights issue or an open offer.

vi. Dilution effect on the shareholding interests of the Shareholders

The shareholdings in the Company as at the Latest Practicable Date and immediately after completion of the Sinopharm Subscription (assuming that there is no change in the issued share capital of the Company other than the allotment and issue of the Sinopharm Shares between the Latest Practicable Date to completion of the Sinopharm Subscription) are summarised as follows:

As at the Latest Practicable Date No. of Shares %	As at the Latest Practicable Date No. of Shares %	Immediately after allotment and issue of the Sinopharm Shares No. of Shares % 1,016,023,044 47.62 125,000,000 5.86 267,511,621 12.54 1,283,534,665 66.02 225,000,000 10.55 499,876,142 23.43 724,876,142 33.98 2,133,410,807 100.00
1,016,023,044 – 267,511,621	50.59 – 13.32	1,016,023,044 125,000,000 267,511,621
1,283,534,665	63.91	1,283,534,665
225,000,000 499,876,142	11.20 24.89	225,000,000 499,876,142
724,876,142 2,008,410,807	36.09 100.00	724,876,142 2,133,410,807

Pursuant to the Sinopharm Subscription Agreement, Sinopharm Fund Trustee agreed to subscribe for the Sinopharm Shares for the benefit of Sinopharm Fund.
Profit Channel Development Limited is wholly owned by Mr. Yang, an executive Director and the managing director of the Company.
On 23 May 2013, the Company also entered into a placing agreement with three placing agents in relation to a best effort placing of up to a total of 225,000,000 new Shares at an issue price of HK$3.10 per Share. The placing was completed on 4 June 2013 and a total of 225,000,000 new Shares were successfully placed to not less than six placees who are third parties independent of the Company and its connected persons. Therefore, the placees are considered as public Shareholders.

Immediately after completion of the Sinopharm Subscription, Sinopharm Fund Trustee will hold 125,000,000 Shares, representing 5.86% of the issued share capital of the Company as enlarged by the issue of the Sinopharm Shares. As stated above,

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LETTER FROM GUOTAI JUNAN

immediately after the completion of the Sinopharm Subscription, the shareholding interests of (i) Sinopharm will be decreased by approximately 2.97% from approximately 50.59% to approximately 47.62%; (ii) Profit Channel Development will be decreased by approximately 0.78% from approximately 13.32% to approximately 12.54%; and (iii) the Shareholders deemed as “public” as at the Latest Practicable Date will be decreased by approximately 2.11% from approximately 36.09% to approximately 33.98%. Having considered that the reasons and benefits of the Sinopharm Subscription as discussed before and, in particular, (i) the cash position of the Group will be strengthened for any potential investments by the Company, including the cash portion of the consideration of the Acquisition (should the Acquisition proceed to completion) without incurring additional interest expenses or commission or further deteriorating its gearing ratio; and (ii) the continuing support of the controlling shareholder can build up the investors’ confidence in the Group, we consider that such dilution effect on the shareholding interests of the existing public Shareholders is acceptable.

vii. Financial effects of the Sinopharm Subscription

Cashflow

According to the 2012 Annual Report, as of 31 December 2012, the Group had cash and cash equivalents of approximately HK$57.05 million and audited net assets of approximately HK$1,043.10 million. Upon completion of the Sinopharm Subscription, the liquidity and cash position of the Group will be improved as the Subscription will facilitate the Company to raise net proceeds of approximately HK$384.80 million. Accordingly, we are of the view that the cash position and the net current assets of the Company are expected to improve upon the completion of the Sinopharm Subscription.

Earnings

Save for the expenses relating to the Sinopharm Subscription, we are of the view that the completion of the Sinopharm Subscription will not have any immediate material impact on the earnings of the Group.

Net assets value

According to the 2012 Annual Report, as at 31 December 2012, the audited net assets value of the Group was approximately HK$1,043.10 million. Upon the completion of the Sinopharm Subscription, the net asset value will improve as the Sinopharm Subscription will increase the total assets and share capital of the Company.

Net asset value per Share

The amount of net proceeds of approximately HK$384.80 million is expected to be received by the Company upon the completion of the Sinopharm Subscription. As a result, bank balances and cash, total assets and net assets of

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LETTER FROM GUOTAI JUNAN

the Group are expected to increase by the same amount. As the Issue Price is of a premium to the Group’s net asset value per Share as discussed above under the section named “Principal terms of the Sinopharm Subscription Agreement”, the net asset value per Share of the Group is expected to increase upon the completion of the Sinopharm Subscription.

RECOMMENDATION

Having taken into account the above principal factors and reasons, we consider that although the Sinopharm Subscription is not in the ordinary and usual course of business of the Company, the terms of the Sinopharm Subscription Agreement are fair and reasonable and normal commercial terms, and the Sinopharm Subscription and the allotment and issue of the Sinopharm Shares pursuant to the Specific Mandate 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 relevant resolution at the EGM to approve the Subscription and the grant of the Specific Mandate.

for identification purpose only

Yours faithfully, For and on behalf of Guotai Junan Capital Limited Wilson Lo Executive director

– 31 –

GENERAL INFORMATION

APPENDIX

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 Group. 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.

DISCLOSURE OF INTERESTS

Directors’ and chief executives’ interests and short positions in shares, underlying shares and debentures of the Company or any associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors or chief executive of the Company 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 (i) were 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 (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

			Approximate
			percentage of
			total
			interests to
		Number of	issued Shares
Name of Directors	Capacity	Shares	(Note 3)
Mr. Yang	Beneficial owner	66,488,379	3.31%
		(Note 1)
	Interest in controlled	267,511,621	13.32%
	corporation	(Note 2)

Note:

(1) Mr. Yang is interested in 66,488,379 Shares to be subscribed by Mr. Yang pursuant to the subscription agreement dated 23 May 2013 entered into between the Company and Mr. Yang.
(2) The 267,511,621 Shares are held by Profit Channel Development Limited which is wholly owned by Mr. Yang.
(3) Based on 2,008,410,807 Shares in issue as at the Latest Practicable Date.

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APPENDIX

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company were interested or were deemed to have interests or short positions 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 (i) were 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 (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

Interests of substantial Shareholders

			Approximate
			percentage of
			total
			interests to
		Number of	issued Shares
Name	Capacity	Shares	(Note 4)
Sinopharm	Beneficial owner	1,016,023,044	50.59%
Mr. Wang Xiaochun	Interest in controlled	334,000,000	16.63%
	corporation	(Note 1)
Mr. Yang	Interest in controlled	267,511,621	13.32%
	corporation	(Note 2)
	Beneficial owner	66,488,379	3.31%
		(Note 3)

Notes:

The 334,000,000 new Shares are to be allotted and issued to Hanmax (which is wholly owned by Mr. Wang Xiaochun) as part of the consideration for the Acquisition. Mr. Wang Xiaochun is a director of Hanmax.
The 267,511,621 Shares are held by Profit Channel Development Limited which is wholly owned by Mr. Yang.
Mr. Yang is interested in the 66,488,379 Shares to be subscribed pursuant to the subscription agreement dated 23 May 2013 entered into between the Company and Mr. Yang.
Based on 2,008,410,807 Shares in issue as at the Latest Practicable Date.

So far as is known to the Directors, as at the Latest Practicable Date, no other persons (other than the Directors, the chief executive and substantial Shareholders disclosed above) had any interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of the Part XV of the

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GENERAL INFORMATION

APPENDIX

SFO or was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of any member of the Group.

COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and their respective associates was considered to have interests in businesses apart from the Group’s businesses which compete, or are likely to compete, either directly or indirectly, with the businesses of the Group pursuant to Rule 8.10 of the Listing Rules.

SERVICE CONTRACTS

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

EXPERT AND CONSENT

The following is the qualification of the expert who has given opinion or advice which is contained or referred to in this circular:

Guotai Junan a corporation licensed to carry out type 6 (advising on corporate finance) regulated activity under the SFO

Guotai Junan has given and has not withdrawn its written consent to the issue of this circular with inclusion of its letter and references to its name in the form and context in which they are included.

As at the Latest Practicable Date, Guotai Junan was not beneficially interested in the share capital of any member of the Group nor has any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group. In addition, Guotai Junan did not have any interest, either directly or indirectly, in any assets which have been, since 31 December 2012 (the date to which the latest published audited consolidated financial statements of the Company were made up), 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.

MATERIAL ADVERSE CHANGE

Up to the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2012 (the date to which the latest published audited consolidated financial statements of the Company were made up).

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GENERAL INFORMATION

APPENDIX

DIRECTORS’ INTERESTS IN ASSETS OF THE GROUP

As disclosed in the Announcement, Mr. Wang Xiaochun is proposed to be appointed as an executive Director with effect from the date of completion of the Acquisition. Mr. Wang Xiaochun is the beneficial owner of 67.9% equity interest in Tongjitang Chinese Medicine Company, which is proposed to be acquired by the Company pursuant to the Acquisition Agreement. Completion of the Acquisition Agreement is subject to the fulfillment of a number of conditions, including the completion of the subscription of 66,488,379 new Shares by Mr. Yang.

Save as disclosed above, none of the Directors had any direct or indirect material interest in any assets which have been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2012 (the date to which the latest published audited consolidated financial statements of the Company were made up) up to the Latest Practicable Date.

DIRECTORS’ INTERESTS IN CONTRACTS OR ARRANGEMENTS

On 23 May 2013, the Company and Mr. Yang entered into an agreement pursuant to which the Company conditionally agreed to allot and issue, and Mr. Yang conditionally agreed to subscribe for, 66,488,379 new Shares at the issue price of HK$3.10 per Share. Details of the subscription by Mr. Yang is set out in the Announcement.

Save as disclosed above, none of the Directors was materially interested in any contract or arrangement subsisting at the Latest Practicable Date which was significant in relation to the business of the Group.

MISCELLANEOUS

The English version of this circular shall prevail over the Chinese text for the purpose of interpretation.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours from 9:00 a.m. to 5:00 p.m. (other than Saturdays, Sundays and public holidays) at the registered office of the Company in Hong Kong up to and including the date of the EGM:

(a) the memorandum of association of the Company;
(b) the Sinopharm Subscription Agreement;
(c) the Acquisition Agreement;
(d) the placing agreement dated 23 May 2013 entered into among the Company and three placing agents in relation to a placing, on a best effort basis, of up to a total of 225,000,000 new Shares;

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GENERAL INFORMATION

APPENDIX

(e) the conditional agreement dated 23 May 2013 entered into between the Company and Mr. Yang in relation to the subscription of 66,488,379 new Shares by Mr. Yang;
(f) the letter addressed to the Independent Shareholders from the Independent Board Committee, the text of which is set out on page 13 of this circular;
(g) the letter of advice from Guotai Junan to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 14 to 31 of this circular; and
(h) the letter of consent from Guotai Junan referred to in the section headed “Expert and Consent” of this appendix.

– 36 –

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

==> picture [252 x 36] intentionally omitted <==

(Incorporated in Hong Kong with limited liability)

(Stock Code: 570)

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting of Winteam Pharmaceutical Group Limited (the “ Company ”) will be held at Conference Room, 1st Floor, No. 2 Rong Gui Qiao Xi Road, Shunde District, Foshan City, Guangdong Province, the PRC on Wednesday, 3 July 2013 at 10:30 a.m. for the purpose of considering and, if thought fit, passing the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT

(A) the subscription agreement dated 23 May 2013 (the “ Sinopharm Subscription Agreement ”) entered into between the Company and 華寶信托有限責任公司 (Hwabao Trust Co., Ltd) (“ Sinopharm Fund Trustee ”), as the trustee of 上海國藥股權投資基金合伙企業（有限合伙） (Shanghai Sinopharm Equity Investment Fund Partnership (Limited Partnership)) (“ Sinopharm Fund ”), a copy of which has been produced to the meeting marked “A” and signed by the chairman of the meeting for the purpose of identification, and the transactions contemplated thereunder be and is hereby approved, ratified and confirmed;
(B) the directors of the Company be and are hereby authorised and granted a specific mandate (the “ Specific Mandate ”) to allot and issue to Sinopharm Fund Trustee, in its capacity as the trustee of Sinopharm Fund and for the benefit of Sinopharm Fund, 125,000,000 new shares of the Company at the issue price of HK$3.10 each in the share capital of the Company in accordance with the terms and conditions of the Sinopharm Subscription Agreement; and
(C) the directors of the Company be and are hereby authorised to do all such further acts and things and execute such further documents and take all such steps which in their opinion may be necessary, desirable or expedient to implement and/or give effect to the Specific Mandate and the Sinopharm Subscription Agreement and the transactions contemplated thereunder.”

By order of the Board Winteam Pharmaceutical Group Limited Yang Bin Executive Director

14 June 2013

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NOTICE OF THE EXTRAORDINARY GENERAL MEETING

Notes:

Any member of the Company entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member of the Company.
A form of proxy for the meeting is enclosed. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority, shall be deposited at the Company’s registered office at Rooms 2801-2805, China Insurance Group Building, 141 Des Voeux Road Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the meeting.

As at the date of this notice, the Board comprises nine Directors, of which Mr. WU Xian and Mr. YANG Bin are executive Directors; Mr. SHE Lulin, Mr. LIU Cunzhou, Mr. DONG Zenghe and Mr. ZHAO Dongji are non-executive Directors; and Mr. ZHOU Bajun, Mr. XIE Rong and Mr. FANG Shuting are independent non-executive Directors.

– 38 –

AI assistant

SPT Energy Group Inc. — Proxy Solicitation & Information Statement 2013

49801_rns_2013-06-13_f6d0af0d-d3a7-4581-a95c-c913a0c7f110.pdf

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY SINOPHARM FUND TRUSTEE UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser to Winteam Pharmaceutical Group Limited

Optima Capital Limited

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

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY SINOPHARM FUND TRUSTEE UNDER SPECIFIC MANDATE

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

THE SINOPHARM SUBSCRIPTION AGREEMENT

Date

Parties

The Sinopharm Subscription

Sinopharm Shares

Issue Price

Conditions precedent

Completion

REASONS FOR THE SINOPHARM SUBSCRIPTION

SHAREHOLDING STRUCTURE OF THE COMPANY

EQUITY FUND-RAISING ACTIVITIES IN PAST TWELVE MONTHS

LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

EGM

RECOMMENDATION

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY SINOPHARM FUND TRUSTEE UNDER SPECIFIC MANDATE

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY SINOPHARM FUND TRUSTEE UNDER SPECIFIC MANDATE

INTRODUCTION

LETTER FROM GUOTAI JUNAN

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

i. Business and financial information of the Company

2011 compared to 2010

LETTER FROM GUOTAI JUNAN

2012 compared to 2011

LETTER FROM GUOTAI JUNAN

ii. Information on Sinopharm Fund Trustee

iii. Reasons for and benefits of the Sinopharm Subscription

LETTER FROM GUOTAI JUNAN

iv. Principal terms of the Sinopharm Subscription Agreement

(a) Review on Share prices performance

(b) Comparable Analyses

LETTER FROM GUOTAI JUNAN

(c) Review on trading liquidity of the Shares

v. Other alternative methods of financing

LETTER FROM GUOTAI JUNAN

vi. Dilution effect on the shareholding interests of the Shareholders

LETTER FROM GUOTAI JUNAN

vii. Financial effects of the Sinopharm Subscription

Cashflow

Earnings

Net assets value

Net asset value per Share

RECOMMENDATION

RESPONSIBILITY STATEMENT

DISCLOSURE OF INTERESTS

Directors’ and chief executives’ interests and short positions in shares, underlying shares and debentures of the Company or any associated corporations

APPENDIX

GENERAL INFORMATION

Interests of substantial Shareholders

COMPETING INTERESTS

SERVICE CONTRACTS

EXPERT AND CONSENT

MATERIAL ADVERSE CHANGE

DIRECTORS’ INTERESTS IN ASSETS OF THE GROUP

DIRECTORS’ INTERESTS IN CONTRACTS OR ARRANGEMENTS

MISCELLANEOUS

DOCUMENTS AVAILABLE FOR INSPECTION

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTION

“ THAT

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SPT Energy Group Inc. Proxy Solicitation & Information Statement 2013