Kingworld Medicines 2017 Annual Profit Attributable to Owners of the Company Up 8.7% to RMB51.06 Million

During the Year Under Review, the Group continued to monitor changes in the industry, actively adjusted its operating strategy, and strengthened online and offline business expansion to consolidate its leading position in the country as a globally leading and renowned great heath service provider. The Group achieved total annual turnover of RMB1,031,488,000, annual profit attributable to owners of the Company increased by 8.7% to RMB51,060,000. Basic earnings per share were up by 12.9% to approximately RMB8.20 cents. The Board has proposed to pay a final dividend of HKD3.43 cents per share for the year ended 31 December 2017, an increase of 16.3% as compared with same period last year.

Mr. Zhao Li Sheng, Chairman and Executive Director of Kingworld Medicines, said, "There were both opportunities and challenges in the pharmaceutical industry during the Year Under Review. The Chinese economy was moving steady on the positive trend and policies conducive to the development of the pharmaceutical industry were in place. The 'Two-invoice System', zero margin for drugs, control on medical insurance fee, however, brought challenges to the industry and speeded up its consolidation. The Group, boasting excellent quality products and effective marketing and promotion strategies, has been able to maintain its leading position amid the healthcare reform, and is looking at a bright future with unlimited development opportunities. In addition, prompted by the country's two-child policy, mother and child e-commerce and healthcare and other related markets are growing rather impressively. Numerous mother and child products distributed by the Group, such as the Culturelle probiotics product series and Lifeline Care maternal and infant fish oil nutrient series (Lifeline Care) from Norway are benefiting from this consumption structure upgrade. "

Nin Jiom Chuan Bei Pei Pa Koa have been one of the major source of revenue in the Group's drug segment. In 2017, with the supply-side reform continuing and the gradual roll out of the"Two-invoice System", growth of the pharmaceutical industry slowed down. During the year, the Group actively adjusted its operational strategy, implemented "Optimization of channels, boosted efficiencies". The group cooperated with 32 distributors in China by signing provincial and regional distribution agreements and as well as beginning cooperation with more than 70 major regional pharmacy chain operators. The influence of Nin Jiom brand equity increased and product coverage expanded, which brought sales at terminals improved. As at 31 December 2017, the sales revenue of Nin Jiom Chuan Bei Pei Pa Koa amounted to approximately RMB542.6 million a decrease of 13.6% as compared with the same period last year. The channel reform, while slowed down sales growth for the year, is expected to help downstream distributors and cooperative partners boost efficiency in the long run. In addition, sales of Taiko Seirogan, another key product distributed by the Group, continued to climb by 8.4%, when compared with the same period last year.

With consumers in China become more and more health conscious and have growing consumption power, the health products market in the mainland has been growing fast. During the Year Under Review, the Group continued to expand and optimize on and offline channels, aiming for omni-channel presence, and promotion and publicity, helping enhance market penetration of products. Such efforts saw its star product of Culturelle probiotics product series record market growth in sales offline as well as on e-commerce platforms. In the Year Under Review, sales revenue of the Culturelle probiotics product series amounted to approximately RMB210.3 million, up by 32% year-on-year.

In 2016, the Group introduced the Norway Lifeline Care maternal and infant fish oil nutrient series. Supported by tailored brand operation plan and benefiting from the full implementation of the "two-child policy" in mainland China, sales revenue from the product series increased 2.7 folds when compared with the same period last year. In the past two years, the Group continued to introduce slimming products including the Fat Blaster Coconut Water from Australia, the Tilman Plant Diet Tea series (Tilman) from Belgium, and Zuccari Slimming Series, the concentrated slimming 100% pineapple juice, from Italy to enrich its product portfolio.

In addition, the Group actively promoted development of online platforms, expanded e-commerce channels, aroused brand awareness and enhanced its corporate image. During the Year Under Review,

the Group set up an e-commerce center and integrated multiple online channel businesses, developed its own e-commerce platform "Kingworld Health Family" with Hybris System, and the platform was launched successfully, allowing it to carry out unified management of all channel orders.

During the year, the Group continued to enhance resources integration of Shenzhen Dong Di Xin Technology Company Limited (Dong Di Xin) in areas including corporate governance and development strategies. Effort enabled it to move closer to realizing a complete, systematic and diversified industrial chain that cover from R&D to manufacturing to sales to channel to end-users.

2017 was the first year of implementation of the Group's "fourth five-year strategy". The Group came up with an overall macro development strategy, continued to improve its nationwide distribution network, strengthened and expanded its e-commerce platform, upheld its "to serve the community and heal the souls", speeded up internationalization, forged on with management system building and enhanced its core competitiveness. The Group will also keep optimizing its capital operation system and management mechanism, so as to consolidate its leadership in China as a globally leading and renowned great health service provider.

Mr. Zhao concluded, "The Group will continue to perfect and strengthen its great health product portfolio and service quality, take full advantage of its diverse channels and rich resources, hasten bringing in medicines and supplements that fit into its great health service provider positioning and the demand of consumers, and for each product segment build its leader brand, so as to strengthen its industry status as a leading agent of leading health product brands. The Group will also keep taking part in and helping foster various charitable activities, actively work with major charity organizations in the mainland, putting in practice the spirit of 'Taking from society, give back to society', so that the 'Kingworld Care and Health Foundation' will enjoy greater influence nationwide."

Topic: Press release summarySectors: Daily Finance, Daily News^[1][2] http://www.acnnewswire.com From the Asia Corporate News Network

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References

1. ^{^} Daily Finance (www.acnnewswire.com)
2. ^{^} Daily News (www.acnnewswire.com)