We are an integrated pharmaceutical company principally engaged in the research, manufacturing and sale of modern Chinese medicines and medical contrast medium in the PRC. According to SMERI Report, our key product, uremic clearance granule (尿毒清颗粒), is a leading modern Chinese medicine for treating kidney disease in the PRC. It has consistently ranked first in the market of oral modern Chinese medicines for kidney disease in the PRC from 2008 to 2012 in terms of retail sales, commanding a market share of 24.1% in 2012. It has also consistently ranked among the top three in the market of kidney medicines in the PRC from 2008 to 2012 in terms of retail sales. Our other key product, gadopentetate dimeglumine injection (钆喷酸葡胺注射液), was ranked third in the market of MRI medical contrast medium in the PRC in 2012 in terms of retail sales, commanding a market share of 17.1%, according to SMERI Report.   

    We have established our own research and development laboratory for kidney medicines in 2006, which was awarded by the government of Inner Mongolia autonomous region as a “Research and Development Centre of Enterprises in Inner Mongolia Autonomous Region” (內蒙古自治区企业研发中心) in November 2012. Our dedicated in-house research and development team comprised 60 research personnel as of 30 June 2013, of whom four hold doctorate degree or master’s degree in pharmaceutical related areas, and more than half of our research personnel have over ten years of experience in the pharmaceutical industry. We have also formed collaboration with various research institutions, hospitals and universities to jointly develop new pharmaceutical products, applications of existing products, product formulation, production methods or techniques and benefit from their expertise, skills, resources and knowledge in these areas. We seek to develop new medicines addressing major unmet medical needs, with the

objective of contributing to the health improvement of the public and to capture a significant portion of market share in new  arkets, as well as to enrich our product offerings. As of the Latest Practicable Date, we had seven product candidates in various stages of development, including two potential kidney medicines, four potential medical contrast mediums and one potential digestive medicine.

    As of 30 June 2013, we had established 31 liaison points covering 30 provinces, autonomous regions, and municipality cities across the PRC. Such liaison points enable our marketing team to provide immediate marketing services and support to our customers. As of 30 June 2013, our marketing team comprised over 550 dedicated marketing representatives, the majority of whom have professional background in medical, pharmaceutical, marketing or other related areas. As pharmaceutical products generally require a higher level of customer knowledge than ordinary consumer goods, and in particular, as our key products are prescription medicines, we consider that sharing specialist knowledge and information with medical practitioners in hospitals, medical institutions and pharmacies and collecting their feedbacks are essential in promoting our products. By doing so, we aim to enrich and update medical practitioners’ knowledge of our specialist medicines and other information on relevant therapeutic areas. Through such interaction, we directly market and promote our kidney medicines and medical contrast medium to hospitals, medical institutions and pharmacies. As part of our marketing activities, we sponsor and attend national and international academic conferences, organise various academic conferences at which renowned scholars are invited to give presentations on the functions of our specialist pharmaceutical products and exchange ideas on future development in the relevant therapeutic areas. In addition, through our co-operation with professional academic bodies such as Chinese Medical Association (中华医学会) and Chinese Medical Doctor Association (中国医师协会), we offer continuing education courses for medical practitioners in respect of kidney disease and medical contrast medium. In addition, to achieve deep market penetration in a more effective manner, we engage Independent Third Party distributors to distribute our kidney medicines and medical contrast medium. These third party distributors are GSP certified corporations and have extensive geographic distribution network with strong logistics support. They are only responsible for reselling and distributing our products to hospitals, medical institutions and pharmacies either directly or indirectly through other sub-distributors. This distribution arrangement enables us to focus our resources in research and development, manufacturing, and marketing of our products, as we do not need to maintain an extensive GSP certified distribution network with logistics coverage at our own expenses.