Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. 上海復星醫藥（集團）股份有限公司 Shanghai Fosun Pharmaceutical (Group) Co., Ltd.* (a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 02196) CONNECTED TRANSACTIONS ENTERING INTO THE CAPITAL INCREASE AGREEMENT THE CAPITAL INCREASE AGREEMENT The Board announces that, on 17 September 2020, the Company, Fosun Healthcare and Fosun High Tech entered into the Capital Increase Agreement with Shenzhen Fosun Health and its existing shareholders, Youle Information and Chancheng Hospital, pursuant to which each of the Company, Fosun Healthcare and Fosun High Tech agreed to make capital contribution in the amount of RMB20 million, RMB46 million and RMB34 million, respectively, to increase the registered capital of Shenzhen Fosun Health from RMB20.408 million to RMB 120.408 million. Upon completion of the transactions under the Capital Increase Agreement, the aggregate equity interest in Shenzhen Fosun Health held by the Company will be approximately 63.5% and Shenzhen Fosun Health will remain as a subsidiary of the Company. IMPLICATIONS OF THE HONG KONG LISTING RULES As Youle Information is a company controlled by Mr. Guo Guangchang, the controlling shareholder of the Company, therefore, Youle Information constitutes an associate of Mr. Guo Guangchang and a connected person of the Company under Chapter 14A of the Hong Kong Listing Rules. Further, as Fosun High Tech is the controlling shareholder of the Company, therefore, it also constitutes a connected person of the Company. Accordingly, the transactions contemplated under the Capital Increase Agreement constitute connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules. Given that the relevant parties to the Capital Increase Agreement are the same connected persons as the relevant parties to Previous Transactions, the transactions contemplated under the Capital Increase Agreement and the Previous Transactions shall be aggregated pursuant to Rule 14A.81 of the Hong Kong Listing Rules. As the percentage ratio applicable to the sum of the transactions contemplated under the Capital Increase Agreement and the Previous Transactions is more than 0.1% but less than 5%, the transactions contemplated under the Capital Increase Agreement are subject to reporting and announcement requirements but are exempted from the independent shareholders’ approval requirement under Chapter 14A of the Hong Kong Listing Rules. 1 A. THE CAPITAL INCREASE CONTRACT The Board announces that, on 17 September 2020, the Company, Fosun Healthcare and Fosun High Tech entered into the Capital Increase Agreement with Shenzhen Fosun Health and its existing shareholders, Youle Information and Chancheng Hospital pursuant to which each of the Company, Fosun Healthcare and Fosun High Tech agreed to make capital contribution in the amount of RMB20 million, RMB46 million and RMB34 million, respectively, to increase the registered capital of Shenzhen Fosun Health from RMB20.408 million to RMB 120.408 million. Upon completion of the transactions under the Capital Increase Agreement, the aggregate equity interest in Shenzhen Fosun Health held by the Company will be approximately 63.5% and Shenzhen Fosun Health will remain as a subsidiary of the Company. The principal terms of the Capital Increase Agreement are summarised below: Date 17 September 2020 Parties (1) The Company; (2) Fosun Healthcare; (3) Fosun High Tech; (4) Youle Information; (5) Chancheng Hospital; and (6) Shenzhen Fosun Health 2 Principal Terms Under the Capital Increase Agreement, the parties agree to the increase in the registered capital of Shenzhen Fosun Health from RMB20.408 million to RMB120.408 million. The parties agreed that the capital contribution to Shenzhen Fosun Health in the aggregate amount of RMB100 million shall be made in the following manner: Capital contribution and subscription Name of party of additional registered capital The Company RMB20 millon Fosun Healthcare RMB46 millon Fosun High Tech RMB34 millon Total RMB100 millon Such investment amount will be financed by the self-raised funds of each of the Company and Fosun Healthcare, respectively. Capital Contribution Arrangement According to the Capital Increase Agreement, each party will pay for the capital contribution according to the following arrangements: (1) Fosun High Tech and the Company shall make one-off payment of their respective capital contribution within five working days from the date of the Capital Increase Agreement; and (2) Fosun Healthcare shall make the first instalment of its capital contribution in the amount of RMB21 million within five working days from the date of the Capital Increase Agreement, and make the remaining part of its capital contribution in the amount of RMB25 million shall be made within half year from the date of the Capital Increase Agreement. 3 Shareholding structure of Shenzhen Fosun Health The shareholding structure of Shenzhen Fosun Health immediately before and after completion of the transactions contemplated under the Capital Increase Agreement is as follows: Unit: RMB million Before completion of the After completion of the Shareholders of transactions under the Capital transactions under the Capital Shenzhen Fosun Health Increase Agreement Increase Agreement Contribution to % of Contribution to % of the registered equity the registered equity capital interest capital interest (approximately) (approximately) The Company 0 0% 20 16.6% Fosun Healthcare 0 0% 46 38.3% Fosun High Tech 0 0% 34 28.2% Youle Information 10 49% 10 8.3% Chancheng Hospital 10.408 51% 10.408 8.6% Total 20.408 100% 120.408 100% Corporate governance Following the completion of the transactions contemplated under the Capital Increase Agreement, the board of directors of Shenzhen Fosun Health shall consist of three directors, of which one director shall be nominated by Fosun High Tech and two directors shall be nominated by the Company; Shenzhen Fosun Health has 1 supervisor to be nominated by the Company. Other terms (1) The Capital Increase Agreement shall be governed by the PRC law. Any dispute shall be resolved by amicable negotiation by parties; otherwise, a legal proceeding shall be brought to the people’s court having jurisdiction at the signing place of the Capital Increase Agreement. (2) The Capital Increase Agreement shall become effective upon affixed with seal by, or signing of, the parties thereto. 4 B. REASONS AND BENEFITS OF THE CAPITAL INCREASE AGREEMENT As an internet medical platform and with staring point of Internet medical consultation, family doctor services and health science content, Shenzhen Fosun Health provides internet medical and family health management services around family users. Entering into the Capital Increase Agreement may be benefit to integrating the medical service resources of the Group, accelerating the development of innovative medical service system, and promoting the internet capability and synergy of business segments of the Group. The proceeds of capital contribution shall be utilised for general working capital of Shenzhen Fosun Health. The Directors (including the independent non-executive Directors) consider that the terms of each of the Capital Increase Agreement are on normal commercial terms, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Mr. Chen Qiyu, Mr. Yao Fang, Mr. Xu Xiaoliang, Mr. Gong Ping and Mr. Pan Donghui, being Directors, abstained from voting on the resolution of the Board in respect of the entering into of the Capital Increase Agreemnt, while the remaining 5 Directors (including 4 independent non-executive Directors) participated in the voting and approved unanimously. C. INFORMATION OF SHENZHEN FOSUN HEALTH Shenzhen Fosun Health is a company incorporated in the PRC with limited liability in January 2019. As at the date of this announcement, Youle Information and Chancheng Hospital holds approximately 49% and 51% shareholding in Shenzhen Fosun Health, respectively. Shenzhen Fosun Health is mainly engaged in, among others, health management and health consultation. The net profit (both before and after taxation) of Shenzhen Fosun Health for the financial year ended 31 December 2019 and the 6-month ended 30 June 2020 are as follows: Unit: RMB million For the For the year ended 6-month ended 31 December 30 June 2019 2020 (unaudited) (unaudited) Net profit/(loss) (before taxation) (10.40) (3.38) Net profit/(loss) (after taxation) (10.40) (3.38) As at 30 June 2020, the unaudited total asset value and the unaudited total net asset value of Shenzhen Fosun Health were RMB0.96 million and RMB0.38 million, respectively. 5 D. INFORMATION OF OTHER PARTIES The Group The Group is a leading healthcare group in the PRC and primarily engaged in business segments including pharmaceutical manufacturing and R&D, healthcare services, medical devices and medical diagnosis as well as pharmaceutical distribution and retail. Fosun Healthcare Fosun Healthcare is a company incorporated in PRC with limited liability, and a subsidiary of the Company, which is mainly engaged in the investment in medical and healthcare industry and its related areas,