GP (HK) Announces Positive Profit Alert The Expected Increase in Consolidated Net Profit Attributable to Owners of the Company for FY2020 No Less Than 40%

GP (HK) Announces Positive Profit Alert The Expected Increase in Consolidated Net Profit Attributable to Owners of the Company for FY2020 No Less Than 40%

(February 21, 2021 - Hong Kong) China Grand Pharmaceutical and Healthcare Holdings Limited (“GP (HK)” or the “Company”, together with its subsidiaries, the “Group”, stock code: 00512) is pleased to announce that for the year ended 31 December 2020, it is expected that the consolidated net profit attributable to owners of the Company recorded an increase of not less than 40% compared with the corresponding period in 2019 (FY2019: approximately HK$1,151 million). The Group can still maintain rapid growth in net profit under the impact of COVID-19 and substantial increment in research and development costs.

The reason for financial results maintained growing in a good shape is mainly attributable to: 1) the Group continuously optimizes the profit structure, continuously develops the Group’s strategy in the development of innovative and barrier medicines and puts more efforts in the sales of innovative high barrier products and high profit margin products; 2) the Group continuously develops markets other than hospital and reinforce the cooperation with e-commerce platforms, which resulted substantial growth in turnover of OTC drugs from e-commerce platforms and wholesale drug stores; 3) the fair value change of investment portfolio in listed companies of the Group contributes increment of investment income.

The Board of China Grand Pharmaceutical and Healthcare Holdings Limited, commented: “Facing the severe impact of COVID-19 pandemic in 2020, the Group's net profit that maintained rapid growth has reconfirmed competitive advantages and fruitful results of GP (HK)’s strategy in the development of innovative high barrier products. Additionally, the Group insists on adapting to the development and changes of the industry, continuously exploring on market demand, increasing the proportion of high gross profit margin products, and constantly expanding sales network, so as to further improve the profitability. Looking ahead, the Group will stick to patients-centered and innovation-driven as the momentum, give full play to its comprehensive strengths, enhance investment in research and development, further introduce advanced technology and products, as well as enrich the product pipeline of innovative and high barrier drugs and expand business presence, thus to strengthen competitiveness and bring greater returns for our shareholders and investors.”