At the 26th Meeting of 5th Board of Directors, held on 3 Nov 2008, the following proposals were examined and approved:

1. the company's eligibility for conducting major asset restructuring via a private placement
Following a self inspection, the company believes that it is eligible to purchase assets via a private placement, in compliance with the Company Law of the PRC, the Securities Law of the PRC, Administrative Measures for the Issuance of Securities by Listed Companies, and Administrative Measures for the Material Asset Restructuring of Listed Companies.

2. issues related to the private placement
The company plans to place 42,872,311 A-shares with a par value of RMB 1.00 at a price of RMB 5.36 per share with Peking University International Hospital I & M Co., Ltd. In return, the company will get a 90.63% stake in Chongqing Daxin Pharmaceutical Co., Ltd., previously held by Peking University International Hospital I & M.

According to the assets value report, value of the above-mentioned 90.63% stake was RMB 229,795,588 as of the base date. The shares to be issued will have a lock-up period of 36 months effective from the date the issuance is completed. Gains and losses the underlying asset may incur during the period from the base date to the delivery date will be undertaken by Peking University International Hospital I & M. The validity of the resolution is 12 months as of the date it is submitted to an extraordinary general meeting of shareholders.

3. a major asset restructuring or related-party transaction
The issue mentioned in proposal 2 constitutes a related-party transaction.

4. a report on the major asset restructuring or related-party transaction (draft)
5. to petition a general meeting of shareholders to exempt Peking University International Hospital I & M. from a tender offer obligation
Currently, Peking University International Hospital I & M indirectly holds a 41.16% stake in the company through Southwest Synthetic Pharmaceutical (Group) Co., Ltd., one of its subsidiaries. Following the private placement, Peking University International Hospital I & M's holdings in the company will increase. Therefore, the board of directors plans to petition a general meeting of shareholders to exempt Peking University International Hospital I & M from a tender offer obligation. The exemption will be further examined by the China Securities Regulatory Commission.

6. an agreement to purchase major assets via a private placement
7. to petition a general meeting of shareholders to authorize the board of directors to deal with procedures pertaining to the private placement
8. to convene the 4th 2008 Extraordinary General Meeting of Shareholders
The above-mentioned proposals 2, 3, 5, 6 and 7 must be submitted to an extraordinary general meeting of shareholders for examination.

Board of Directors
29 Oct 2008


Source: Securities Times

Date: 4 Nov 2008

CN01/DC/LZ/JE/KM