(1) MAJOR TRANSACTION DISPOSAL OF A SUBSIDIARY AND (2) RESUMPTION OF TRADING

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1 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. THE EQUITY TRANSFER AGREEMENT (1) MAJOR TRANSACTION DISPOSAL OF A SUBSIDIARY AND (2) RESUMPTION OF TRADING On 18 April 2017 (in non-trading hours), the Company, Pharmaceutical Factory (together with the Company hereinafter referred to as the Sellers ) and the Purchaser entered into the Equity Transfer Agreement, pursuant to which the Sellers agreed to sell and the Purchaser agreed to acquire the entire equity interest of Weixing for a consideration of RMB 4,552,000,000 (equivalent to approximately HKD 5,140,000,000). As one of the applicable percentage ratios calculated in accordance with Chapter 14 of the Listing Rules in relation to the Disposal exceeds 25% but less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules, and is therefore subject to the requirements of reporting, announcement and Shareholders approval pursuant to the Listing Rules. Accordingly, the Company will propose an ordinary resolution in relation to the Disposal for the Shareholders to consider, and if thought fit, pass the resolution to approve the Equity Transfer Agreement and the transactions contemplated thereunder at the Company s upcoming AGM in accordance with the requirements of the Listing Rules. To the best of the Directors knowledge, information and belief, no Shareholder has a material interest in the Disposal and is required to abstain from voting for approving the Disposal. As more time is required to prepare the 1

2 information to be included in the circular containing, amongst other things, details of the Disposal, the circular is expected to be despatched on or before 23 May Completion of the Disposal and the transactions contemplated thereunder is subject to the Shareholders approval. Accordingly, the Disposal may or may not proceed. Furthermore, the net profit to be realised from the Disposal is a preliminary estimate, and the actual net profit will be subject to the audited financials for the year ending 31 December 2017 of the Company. Shareholders and potential investors should exercise caution when dealing in the securities of the Company. RESUMPTION OF TRADING At the request of the Company, trading in the H Shares of the Company on the Stock Exchange has been halted with effect from 9:00 a.m. on 18 April 2017, pending the publication of this announcement. Application has been made by the Company for the resumption of trading in the H Shares of the Company on the Stock Exchange with effect from 9:00 a.m. on 20 April INTRODUCTION On 18 April 2017 (in non-trading hours), the Company, Pharmaceutical Factory and the Purchaser entered into the Equity Transfer Agreement, pursuant to which the Sellers agreed to sell and the Purchaser agreed to acquire the entire equity interest of Weixing for a Consideration of RMB 4,552,000,000 (equivalent to approximately HKD 5,140,000,000). The principal terms of the Equity Transfer Agreement are set out as follows: THE EQUITY TRANSFER AGREEMENT Date: 18 April 2017 Parties: (i) the Company; (ii) Pharmaceutical Factory, a wholly-owned subsidiary of the Company; and (iii) the Purchaser To the best of the Directors knowledge, information and belief having made all reasonable enquiries, the Purchaser is a third party independent of the Company and its connected persons. 2

3 Assets to be disposed of The entire equity interest of Weixing is held by the Company and Pharmaceutical Factory as to approximately 83.49% and 16.51% respectively as at the date of this announcement. Consideration Pursuant to the terms of the Equity Transfer Agreement, the total consideration of the Disposal (the Consideration ) amounts to RMB 4,552,000,000 (equivalent to approximately HKD 5,140,000,000), representing (i) the loan owed by Weixing to the Company of RMB 22,067, as at the date of this announcement; (ii) the prepayment of the expected construction fee of RMB 50,000,000 for the proposed construction of the public rental housing associated with the Transformation Project by Weixing and the Purchaser; and (iii) the aggregate consideration for the transfer of the equity interest of Weixing from the Company and Pharmaceutical Factory to the Purchaser which accounted to RMB 4,479,932, (of which the Company shall receive RMB 3,740,295, and Pharmaceutical Factory shall receive RMB739,636,792.25). The Consideration is to be settled as follows: (i) On 19 January 2017, the Purchaser entrusted Guowei Fortune to pay RMB 400,000,000 (equivalent to approximately HKD 450,000,000), being the initial deposit, to the Company; and (ii) RMB 3,340,295, (equivalent to approximately HKD 3,770,000,000) and RMB 739,636, (equivalent to approximately HKD 840,000,000), representing the remaining balance of the aggregate consideration, shall be paid to the Company and Pharmaceutical Factory respectively within 5 Business Days from the date of the Equity Transfer Agreement. The Consideration was arrived at based on normal commercial terms after arm s length negotiation between the Sellers and Purchaser after taking into account the audited total assets value and net assets value of Weixing as at 31 March 2017, the fair market value and potential development of the assets of Weixing including houses and buildings and land use right, etc., the prevailing market value of comparable assets of Weixing, and the terms of cooperation as proposed by other intention cooperators. 3

4 Condition Precedent Completion is conditional upon the Company having obtained the Shareholders approval in respect of the transactions contemplated under the Equity Transfer Agreement pursuant to the Listing Rules. Completion The Completion shall take place on the Completion Date when the industrial and commercial registration formalities for changes related to the transfer of the entire equity interest of Weixing has been completed and the registration of change of shareholder of Weixing has been obtained after the completion of the registration formalities. Pursuant to the Equity Transfer Agreement, the Sellers and the Purchaser shall assist Weixing to effect the aforesaid registration process in respect of the transfer of the equity interest of Weixing with the industrial and commercial registration authority, and the Sellers shall settle all debts of Weixing and terminate the labor contracts of all employees of Weixing and bear the liability if labor disputes occur before the Completion Date. Upon completion of the Disposal, each of the Company and Pharmaceutical Factory will cease to have any equity interest in Weixing. INFORMATION ABOUT WEIXING Weixing is a company established in the PRC and an indirect wholly-owned subsidiary of the Company. The business scope of Weixing includes trading and enterprise management service, etc. Weixing has a total registered capital of RMB 309,562,400 which is held by the Company and the Pharmaceutical Factory as to approximately 83.49% and 16.51% respectively as at the date of this announcement. Its major assets are houses and buildings, machinery equipment and land use right, etc. The audited total assets and net assets of Weixing as at 31 March 2017 amounted to approximately RMB million and RMB million, respectively. The following is the net loss (both before and after taxation and extraordinary items) of Weixing for the two financial years ended 31 December 2016: 4

5 For the financial year ended 31 December (Approximate) (Approximate) RMB million RMB million Profit/(Loss) before taxation and extraordinary (1.78) (18.35) items Profit/(Loss) after taxation and extraordinary items (1.78) (18.35) FINANCIAL IMPACT OF THE DISPOSAL As at the date of this announcement, Weixing is an indirect wholly-owned subsidiary of the Company. The financial results and financial positions of the Weixing are consolidated with the financial statements of the Company. Immediately upon Completion, the Company s interest in Weixing will be ceased. Accordingly, the financial results and financial positions of the Weixing will cease to be consolidated with the financial statements of the Company after the Completion. It is expected that the completion of the Disposal will generate an unaudited accounting net profit of approximately RMB 3,455 million for the Group for the financial year ending 31 December 2017, being the difference between the Consideration and the investment costs in Weixing made by the Company and Pharmaceutical Factory, and deducting the relevant expenses in relation to the Disposal such as transaction costs and taxation, etc.. REASONS FOR THE DISPOSAL AND USE OF PROCEEDS As disclosed in the annual report of the Company for the financial year ended 31 December 2016, the Group had been actively communicating and coordinating with government authorities on the Transformation Project. On 20 December 2016, the Zhuhai municipal government had granted an approval on the Transformation Project. On 20 January 2017, a memorandum of understanding in relation to the proposed cooperation on the Transformation Project was entered into among the Company, Pharmaceutical Factory and Guowei Fortune. Please refer to the overseas regulatory announcements of the Company dated 20 December 2016 and 20 January 2017 in relation to the details of the Transformation Project and the memorandum of understanding respectively. The reasons for the Disposal are mainly to allow the Company to focus on the bio-pharmaceutical field and, in the meanwhile, to propel the implementation of the Transformation Project at the request of the government. 5

6 Upon completion of the Disposal, the Company agrees that the Transformation Project will be implemented and completed by Weixing as the implementing entity of such project, and Weixing shall enjoy such all the rights and benefits as may be derived from the Transformation Project (except for the property right of the public rental housing associated with the Transformation Project). The Company will cease to have any interest in the Transformation Project except for the property right of the public rental housing associated with the Transformation Project as approved by the Zhuhai municipal government. The Group, through its subsidiaries, is principally engaged in the research and development, production and distribution of Chinese and Western drug preparation products, bulk medicines and intermediates, as well as diagnostic reagents and equipment. The Board is of the view that it is in the interests of the Company and the Shareholders as a whole to realize the Group s entire equity interest in the Weixing through the Disposal. In addition, the Disposal can bring in additional source of cash and capital for the Group s business development. As such, the Group has decided to dispose the entire equity interest of Weixing. It is expected that the Disposal would not have material impact on the day-to-day operation of the Group. The proceeds from the Disposal will be used as general working capital of the Group. The Board considers that the Disposal would further improve the financial and cash position of the Group and provide sufficient financial support for the development of the main business of the Group. The Directors (including the independent non-executive Directors) consider that the Disposal is on normal commercial terms and the terms of the Equity Transfer Agreement are fair and reasonable and in the interests of the Shareholders of the Company as a whole. INFORMATION ABOUT THE GROUP The Group, through its subsidiaries, is principally engaged in the research and development, production and distribution of Chinese and Western drug preparation products, bulk medicines and intermediates, as well as diagnostic reagents and equipment. INFORMATION ABOUT PHARMACEUTICAL FACTORY Pharmaceutical Factory is a company incorporated in the PRC with limited liability and a wholly-owned subsidiary of the Company. It is principally engaged in production and sale of self-made chemical drugs, biochemical drugs, microbiological preparations, antibiotics, etc. 6

7 INFORMATION ABOUT THE PURCHASER The Purchaser is a company incorporated in the PRC with limited liability, which is mainly engaged in principle business of fortune investment, project investment; investment consultation (excluding licensed business project); education investment and management. LISTING RULES IMPLICATION As one of the applicable percentage ratios calculated in accordance with Chapter 14 of the Listing Rules in relation to the Disposal exceeds 25% but less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules, and is therefore subject to the requirements of reporting, announcement and Shareholders approval pursuant to the Listing Rules. Accordingly, the Company will propose an ordinary resolution in relation to the Disposal for the Shareholders to consider, and if thought fit, pass the resolution to approve the Equity Transfer Agreement and the transactions contemplated thereunder at the Company s upcoming AGM in accordance with the requirements of the Listing Rules. To the best of the Directors knowledge, information and belief, no Shareholder has a material interest in the Disposal and is required to abstain from voting for approving the Disposal. As more time is required to prepare the information to be included in the circular containing, amongst other things, details of the Disposal, the circular is expected to be despatched on or before 23 May Completion of the Disposal and the transactions contemplated thereunder is subject to the Shareholders approval. Accordingly, the Disposal may or may not proceed. Furthermore, the net profit to be realised from the Disposal is a preliminary estimate, and the actual net profit will be subject to the audited financials for the year ending 31 December 2017 of the Company. Shareholders and potential investors should exercise caution when dealing in the securities of the Company. RESUMPTION OF TRADING At the request of the Company, trading in the H Shares of the Company on the Stock Exchange has been halted with effect from 9:00 a.m. on 18 April 2017, pending the publication of this announcement. Application has been made by the Company for the resumption of trading in the H Shares of the Company on the Stock Exchange with effect from 9:00 a.m. on 20 April

8 DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: AGM the upcoming annual general meeting for the year 2016 of the Company to be held on 13 June 2017 Board the board of Directors of the Company Business Day a day (other than Saturday, Sunday and public holiday) when normal commercial banks in Hong Kong are opened for general banking business Company Livzon Pharmaceutical Group Inc.* ( 麗珠醫藥集團股份有限公司 ), a joint stock company incorporated in the PRC with limited liability, the Shares of which are listed on the Shenzhen Stock Exchange and the Stock Exchange Completion completion of the Disposal Completion Date the date of completion of the Disposal Consideration a total consideration of RMB 4,552,000,000 payable by the Purchaser to the Sellers in respect of the Disposal pursuant to the terms and conditions of the Equity Transfer Agreement Director(s) the director(s) of the Company Disposal the Sellers proposed disposal of the entire equity interest held by the Sellers to the Purchaser pursuant to the terms and conditions of the Equity Transfer Agreement Equity Transfer Agreement the agreement dated 18 April 2017 entered into between the Sellers and the Purchaser in respect of the Disposal Group collectively the Company and its subsidiaries 8

9 Guowei Fortune Guowei Fortune Investment Group Co., Ltd. * ( 國維財富投資集團有 限公司 ), a company incorporated in the PRC with limited liability, and the controlling shareholder of the Purchaser HKD Hong Kong dollars, the lawful currency of Hong Kong Hong Kong Hong Kong Special Administrative Region of the PRC Pharmaceutical Factory Livzon Group Livzon Pharmaceutical Factory * ( 麗珠集團麗珠製藥 廠 ), a wholly-owned subsidiary of the Company Purchaser Zhuhai Hengqin Weichuang Fortune Investment Co., Ltd. * ( 珠海橫琴 維創財富投資有限公司 ), a company incorporated in the PRC with limited liability Listing Rules The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended and supplemented or otherwise modified from time to time PRC the People s Republic of China, excluding Hong Kong, Macau Special Administrative Region of the PRC and Taiwan for the purpose of this announcement RMB Renminbi, the lawful currency of the PRC Shareholder(s) holder(s) of the share(s) of the Company Shenzhen Stock Exchange 深圳證券交易所 (the Shenzhen Stock Exchange) Stock Exchange The Stock Exchange of Hong Kong Limited 9

10 Transformation Project Xiangzhou District Livzon Group Transformation Project update unit ( 香洲區麗珠醫藥集團改造項目更新單元 ), please refer to the overseas regulatory announcements of the Company dated 20 December 2016 and 20 January 2017 for further details of the project Weixing Zhuhai Weixing Shiye Co., Ltd. ( 珠海維星實業有限公司 ) (formerly known as Zhuhai Livzon Pharmaceutical Industrial Co., Ltd. ( 珠海市麗珠醫藥工業有限公司 )), a company incorporated in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company % per cent By order of the Board Livzon Pharmaceutical Group Inc. * 麗珠醫藥集團股份有限公司 Yang Liang Company Secretary Zhuhai, China 19 April 2017 As at the date of this announcement, the executive Directors of the Company are Mr. Tao Desheng (Vice Chairman and President), Mr. Fu Daotian (Vice President) and Mr. Yang Daihong (Vice President); the non-executive Directors of the Company are Mr. Zhu Baoguo (Chairman), Mr. Qiu Qingfeng and Mr. Zhongshan; and the independent non-executive Directors of the Company are Mr. Xu Yanjun, Mr. Guo Guoqing, Mr. Wang Xiaojun, Mr. Zheng Zhihua and Mr. Xie Yun. Note: For the purpose of this announcement, the exchange rate of RMB1.00 = HKD1.13 has in general been used for the conversion of RMB into HKD for indication only. * For information purpose only 10