Sihuan Pharmaceutical : VOLUNTARY ANNOUNCEMENT - Commencement of Phase III Clinical Trial in the PRC for Self-Developed Innovative Patented Drug "Anaprazole Sodium" and Inclusion of "Huineng" into the National Reimbursement Drug List

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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. Sihuan Pharmaceutical Holdings Group Ltd. 四 環 醫 藥 控 股 集 團 有 限 公 司 (incorporated in Bermuda with limited liability) (Stock code: 0460) VOLUNTARY ANNOUNCEMENT Commencement of Phase III Clinical Trial in the PRC for Self-Developed Innovative Patented Drug '' Anaprazole Sodium '' and Inclusion of '' Huineng ® '' into the National Reimbursement Drug List The board of directors ( '' the '' Board '' ) of Sihuan Pharmaceutical Holdings Group Ltd. (the '' Company '' or '' Sihuan Pharmaceutical '' , together with its subsidiaries, the '' Group '' ) is pleased to announce the progress achieved by the Group in the research and development of drugs for treating digestive system and liver related diseases. '' Anaprazole Sodium '' , the Group ' s self-developed innovative patented drug, has commenced phase III clinical trial in the People ' s Republic of China (the '' PRC '' ) (the '' Study '' ), while '' Huineng ® '' , which is available on the market, has been included in Class B of the Medicine Catalog for National Basic Medical Insurance, Work-Related Injury Insurance and Maternity Insurance 《 ( 國家基 本醫療保險、工傷保險和生育保險藥品目錄》 ) (the '' National Reimbursement Drug List '' ) in the PRC. Anaprazole sodium is the only self-developed proton pump inhibitor ( '' PPI '' ) in the PRC, with Chinese and international patents. The results of the completed phase II clinical trial, a multi-centre, randomized, double-blind,double-simulation, positive drug parallel controlled study to assess the effectiveness and safety of the new drug in duodenal ulcer treatment, showed that it is effective in treating duodenal ulcer, conducive to ulcer healing and relieves ulcer-related symptoms. Gastroscopy demonstrated that the drug has a healing rate for duodenal ulcer comparable to similar products and is positive in safety and drug tolerance, thus successfully entering phase III clinical trial. The Study will be conducted in about 30 to 45 clinical centres across the PRC. A multi-centre, randomized, double-blind, double- simulation, positive drug parallel controlled study will be adopted to assess the effectiveness and safety of anaprazole sodium enteric-coated tablets in treating duodenal ulcer. The Study - 1 - will adopt a fine categorization approach to divide duodenal ulcer subjects into groups, with a view to providing more precise treatment approaches and options for clinical practice. The Study achieved significant progress with the first subject being enrolled in January 2020 after its launch. According to the official announcement of the '' National Reimbursement Negotiation Drug List 2019 '' ( 二零一九年國家醫保談判准入藥品名單 ) promulgated by the National Healthcare Security Administration ( 國家醫療保障局 ) and the Ministry of Human Resources and Social Security ( 人力資源社會保障部 ) of the PRC, monoammonium glycyrrhizinate and cysteine and sodium chloride injection (Huineng ® ), the Group ' s existing drug available on the market, has also been officially included in Class B of the National Reimbursement Drug List. The Group believes this will contribute to rapid sales growth of Huineng ® . According to IQVIA ' s China Hospital Pharmaceutical Audit Report (CHPA, sales data of hospitals with 100 or more beds), the market for acid suppression and peptic ulcer drugs in the PRC is huge with continuous growth. Sales in 2019 amounted to approximately RMB 26.9 billion. PPI drugs dominated market share and among the top 10 anti-ulcer drugs in terms of market share, 6 are PPI drugs. The market for hepatoprotective drugs like Huineng ® also maintained impressive growth, with an overall sales in 2019 amounting to approximately RMB 5.4 billion with a rapid growth rate of 107%. Huineng ® is among the top 3 monoammonium glycyrrhizinate injection products. With the rapid progress in its clinical trial, anaprazole sodium will create synergy with Jie ' ao ® (Roxatidine acetate hydrochloride for injection), the Group ' s new generation of histamine H2 receptor antagonist available on the market, in the area of acid suppression drugs. While Huineng ® has been included in the National Reimbursement Drug List in recognition of the Group ' s efforts in expediting the development of liver disease treatment, the Group is still pushing forward the development of other drugs in the same area. The Group ' s product lines for treating digestive system and liver related diseases will be more extensive and diversified. This announcement is being made by the Company on a voluntary basis to update the investing public on the Group ' s latest business development, and does not constitute, and is not intended to be, an advertisement regarding the use of any medicine, surgical appliance, treatment or orally consumed product. By order of the Board Sihuan Pharmaceutical Holdings Group Ltd. Dr. Che Fengsheng Chairman and Executive Director Hong Kong, 13 February 2020 As at the date of this announcement, the executive directors of the Company are Dr. Che Fengsheng (Chairman), Dr. Guo Weicheng (Deputy Chairman and Chief Executive Officer), Mr. Choi Yiau Chong, Dr. Zhang Jionglong and Ms. Chen Yanling; the non-executive director of the Company is Mr. Kim Jin Ha; and the independent non-executive directors of the Company are Mr. Patrick Sun, Mr. Tsang Wah Kwong and Dr. Zhu Xun. - 2 -

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