2017 Annual Results Investor Presentation 26th June 2017 | Hong Kong

Cultivating Brands Embracing Technological Advancement .

Stock Code 2633

Agenda

• Welcoming Remarks and Key Events After IPO

• M&A – Rationales & Approach

• Key Elements of Our Growth Strategy

• How Our Businesses Performed in FY2017

• Financial Results and Highlights

• Outlook

• Q&A

SPEAKERS:

Derek Sum, Chairman and CEO

Raymond Yim, Executive Director

Victor Lau, VP – Finance and Investor Relations

2

Key Events After IPO

Main Board

09/2016

Medipharma

11/2016

Synco

11/2016

Ho Chai Kung Brand

01/2017

HKIB

12/2016

Saplingtan & Shiling

Oil

03/2017

Gold Medal Award Geneva

Invention

04/2017

Hong Ning Hong

05/2017 06/2017

IPO M&A Operation R&D M&A M&A R&D M&A MSCI

MSCI HK Micro-cap

Index

Incorporate

3

Merger & Acquisition

Rationales & Approach

4

Rationales of “M&A”

保濟丸

唐太宗 活络油

飛鷹 活絡油

VICKMANS

APT PHARMA

EURO- PHARM

JEAN MARIE

SYNCO

CAMBODIA MYANMAR VIETNAM

HONG NING HONG

十靈丹 十靈油

何濟公 MEDI-

PHARMA KAREN

PHARMA

MARCHING

UPLL

NEOCHEM

兜安氏 藥膏

秀碧 除疤膏

CHINA MACAU

JAPAN SINGAPORE THAILAND MALAYSIA INDO- NESIA

AUSTRALIA

5

Defend & Attack

Assets on the chessboard are networked

Putting the right asset in the right place

IMPA

CT

TIME

Create chemistry effect through shared data and customer reach

Add dimensions to our portfolio

Generate profit and cash flow

Generate synergies

Catalyzing and paving way for next strategic move

Gain access to new markets and broaden geographic reach

Build long term values for Jacobson

Goals of “M&A”

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1

How To Approach “M&A”

“M&A” strategy has to be in sync with business strategies

2 Market intelligence & people network are the keys to making a sensible “M&A” move

3 “M&A” is an integral part of a bigger corporate plan, not a stand-alone strategy

7

We Remain Focused…

Vision-Driven

Culture – Challenge & Commit

Strategic Focus

Strategic Focus

Pursue continued growth in revenues, horizontally and vertically

Build an expandable platform of proprietary brands to boost revenue and deepen geographic reach

Pursue product differentiation to give us edge to compete and gain market shares

8

Key

Elements of Our Growth Strategy

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Sharpen Product Portfolio

Sustained investment in R&D

Enter early with off-patent molecules (e.g. Entecavir, Rosuvastatin, Celecoxib, UDCA, Mesalazine)

Focus on Sales & Marketing Excellence

Cultivate strong brands to attain growing revenue stream and market reach

Strengthen Customer Relationship Management

Succeed on M&A

Key Elements of Our Growth Strategy

“Integration” is the key to success

Have people ready and committed to take on the challenges

10

How

Our Businesses Performed in FY2017

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How We Performed…

Po Chai Pills sales in Hong Kong grew by +22.3% Proprietary Medicines:

Revenue grew by

+13.9% to HK$158.4M

Sales of Puji Pills materialized from new China distributors since March 2017

Solid revenue performance of Ho Chai Kung

Performance Growth Drivers

Solid growth of +15.9% in revenue and +30.7% in adjusted profit

Generic: Revenue grew by

+16.2% to HK$1,097.6M

Public Sector grew by

+13.6%

Private Sector grew by

+17.4%

Expanded market shares and price inflation for respiratory and GI products in retail

Strong sales momentum for respiratory and cardiovascular products

Secured contracts for Losartan, Mesalazine, UDCA & Bisacodyl Suppository

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Financial

Results and Highlights

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(HK$’m) FY2017 FY2016 Changes

Revenue 1,256.0 1,083.9 +15.9%

Gross Profit 556.9 487.8 +14.2%

Adjusted Profit Attributable to Shareholders

201.9 154.5 +30.7%

Dividend – Interim and Final (HK cents) 2.2 N/A

EPS - Basic and Diluted

(HK cents/shares) 11.39 11.13

Key Financial Data

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944.8 1,097.6

139.1

158.4

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

2016 2017

Generic Drugs Proprietary Medicines

Revenue increased by 15.9% to HK$1,256.0 million

• Increase in revenue of $152.8 million in Generic Drugs Segment (87%) and HK$19.3 million in Proprietary Medicine Segment (13%)

• Significant increase in revenue contributing from revenue of both public and private sectors. With the previous acquisition of Medipharma, remarkable profit was contributed to the private sector

For the year ended 31 March

(HK$ ’M)

1,083.9

1,256.0

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Revenue

487,755 556,888

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

2016 2017

(HK$ ’000)

For the year ended 31 March

Gross Profit increased by 14.2% to HK$556.9 million • Contributed by the

increase in revenue of $172.1 million while offset by the increase in production cost

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Gross Profit

145.6 179.3

8.9

22.6

0

20

40

60

80

100

120

140

160

180

200

220

2016 2017

Net Profits One-off expenses

(HK$ ’M)

201.9

154.5

Adjusted profit

attributable to the

shareholders increased by

30.7% to HK$201.9 million

• The increase in profit

attributable to

shareholders reflected

the increase in profit

from operations offset

by the additional

finance costs and

income tax

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For the year ended 31 March

Profit Attributable to Shareholders

(HK$’000) FY2017 FY2016

Total Assets Less Current Liabilities 1,911,578 1,005,215

Cash and Cash Equivalents 359,685 82,925

Inventories 261,313 196,915

Trade and Other Receivables 201,470 209,957

Net Gearing Ratio 32.6% 37.3%

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Key Balance Sheet Data

Outlook

For Future Growth

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20

Management Response Opportunity

Hong Kong & emerging markets in SEA offers room of growth

Accelerate product development

Strengthen our “First-to-opportunity” position

Deploy dedicated resources for export markets

E-commerce in China presents a viable avenue for OTC Products

Realign resources to actively exploit online marketing and e-commerce avenues for customers in China

Pockets of “M&A” emerge every now and then

Establish clear M &A agenda

Aim for synergies and strategic fit

Continue our success on “Buy & Build” model

Outlook – Better Positioned For Future Growth

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Thank You

Cultivating Brands Embracing Technological Advancement

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Q & A

Cultivating Brands Embracing Technological Advancement

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Appendix

Cultivating Brands Embracing Technological Advancement

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Year ended 31 March

2017 2016

HK$’000 (audited)

HK$’000 (audited)

REVENUE 1,255,957 1,083,856

Cost of sales (699,069) (596,101)

GROSS PROFIT 556,888 487,755

Other income 11,740 (465)

Selling and distribution expenses (145,350) (133,807)

Administrative and other operating expenses (188,036) (167,963)

Profit from operations 235,242 185,520

Finance costs (13,996) (2,523)

PROFIT BEFORE TAX 221,246 182,997

Income tax (39,986) (30,335)

PROFIT FOR THE PERIOD 181,260 152,662

Item that may be reclassified to profit or loss:

Exchange differences on translation of financial statements of operations outside Hong Kong (1,845) (2,355)

Other comprehensive income (1,845) (2,355)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 179,415 150,307

Attributable to:

Equity shareholders of the Company 179,328 145,610

Non-controlling interests 1,932 7,052

TOTAL PROFIT FOR THE PERIOD 181,260 152,662

Earnings per share attributable to equity shareholders of the Company

- Basic and diluted (HK cents) 11.39 11.13

Annual consolidated statement of profit or loss and other comprehensive income

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As at 31 March 2017

As at 31 March 2016

HK$’000 (audited)

HK$’000 (audited)

NON-CURRENT ASSET Property, plant and equipment 1,007,672 815,323 Leasehold land 48,839 51,418 Intangible assets 1,056,801 426,681 Non-current assets 20,420 27,710

Deferred tax assets 2,423 1,469

Total non-current assets 2,136,155 1,322,061 CURRENT ASSET Inventories 261,313 196,915 Trade and other receivables 201,470 209,957 Current tax recoverable 11,444 10,192 Cash and cash equivalents 359,685 82,925 Total current assets 833,912 499,989 CURRENT LIABILITIES Trade and other payables 108,141 104,585 Bank loans 937,486 439,335 Obligations under finance leases 149 692 Amounts due to the Controlling Parties - 36,202 Dividend payables - 224,800 Current tax payable 12,713 11,221 Total current liabilities 1,058,489 816,835 NET CURRENT ASSETS/(LIABILITIES) 224,577 316,846 Total assets less current liabilities 1,911,578 1,005,215 Non-current liabilities Obligations under finance leases 373 522 Deferred tax liabilities 138,887 48,548

139,260 49,070 Net Assets 1,772,318 956,145 EQUITY Equity attributable to equity shareholders of the Company Share capital 18,156 13,125 Reserves 1,731,247 893,757 Non-controlling interests 22,915 49,263 Total equity 1,772,318 956,145

Annual consolidated statement of financial position

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Cultivating Brands Embracing Technological Advancement

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