On 28 January 2015, Shanghai Fosun Pharmaceutical (Group) Co., Ltd.(hereinafter referred to as “Fosun Pharma” or the “Company”, Stock Code: 600196-SH, 02196-HK) announced that Shanghai Yicheng Hospital Investment Management Company Limited (上海醫誠醫院投資管理有限公司) (“Shanghai Yicheng”), a wholly-owned subsidiary of the Company, entered into an investment cooperation framework agreement  with the First Hospital of Qiqihar City (齊齊哈爾市第一醫院) (the ”First Hospital of Qiqihar”). The parties proposed to jointly establish a for-profit healthcare institution with diversified ownership, tentatively named as the South Branch of the First Hospital of Qiqihar City* (齊齊哈爾市第一醫院南院) (the “New Hospital”). Apart from the establishment of the New Hospital, the announcement also stated that the parties intended to jointly establish a pharmaceutical and medical device company in Qiqihar City, which will be engaged in centralized management of supply chains in relation to pharmaceutical products, devices, consumables and equipment to the First Hospital of Qiqihar and the New Hospital.

The First Hospital of Qiqihar, being one of the largest public hospitals in Qiqihar, is the largest healthcare and accident and emergency center, providing integrated services of medical treatment, prevention, research, education and rehabilitation, in the northwestern region of Heilongjiang Province, the PRC. It was a pioneer in introducing into the northwestern region of Heilongjiang Province certain new medical technologies including radiation therapy for cancer, gamma knife surgery, interventional therapy, aesthetic laser treatment, retinal laser treatment, blood purification treatment, etc. which are advanced in the nation and leading in the province. It currently has nine province-level key specialties and 20 city-level key specialties, and has established excellent brand reputation inside and outside Heilongjiang Province.

As set out in the announcement, in this cooperation, Shanghai Yicheng shall make contributions in cash (representing 53% equity interest of the New Hospital) and the First Hospital of Qiqihar (or through its subsidiary) shall make contributions by land, buildings and other fixed assets (representing 47% equity interest of the New Hospital). The New Hospital will be positioned as a specialized healthcare institution providing specialized and integrated healthcare services (大專科、小綜合特色醫療) and will be constructed in compliance with the requirements for tier-three class A hospital.

As a prioritized business in the development plan of Fosun Pharma, the healthcare services of the Company expanded steadily in recent years. At present, the Company has preliminary established a strategic deployment of healthcare services segment with high-end healthcare institutions in the more developed coastal cities and specialty and general hospitals in second-tier and third-tier cities in the PRC. In 2010, Fosun Pharma expanded into the domestic high-end medical treatment service market through strategic cooperation with Chindex International Inc., and jointly promoted the development of “United Family Hospital”, a high-end medical treatment service brand of Chindex in China. In the meantime, the Company also marched into the specialty and general medical services market of China by investing in Anhui Jimin Cancer Hospital (安徽濟民腫瘤醫院), Yueyang Guangji Hospital (岳陽廣濟醫院), Suqian Zhongwu Hospital (宿遷鐘吾醫院) and Foshan Chancheng Hospital (佛山襌城醫院). The cooperation with First Hospital of Qiqihar will facilitate Fosun Pharma’s overall arrangement in the specialty and general hospital market in second-tier and third-tier cities.

Fosun Pharma indicated that entering into the framework agreement through Shanghai Yicheng, its wholly-owned subsidiary, with the First Hospital of Qiqihar is an important initiative for the Company and its subsidiaries to explore the opportunities in establishing a hospital with diversified ownership, which is expected to further improve the regional deployment and the long-term development of the healthcare service business of Fosun Pharma.

The Company also pointed out that as the project is only an intention at the stage, the specific matters involved in such cooperation shall subject to the final investment cooperation agreement between both parties and the agreed content therein.