Contents

Corporate Profile

Industry Overview

Financial Highlights

Future Plans and Prospects

Investment Highlights

Listing Details

Corporate Profile

Corporate Profile

Established in 1994

Engaged in marketing, distribution, R&D and manufacturing of proprietary Chinese medicines

Products marketed under the Kanpoyakudo ( 漢方藥堂 ) label

A strong in-house advisory board of 16 members, consisting of academics and professionals from different backgrounds

New Chinese Medicine (“NCM”) - modernize traditional Chinese medicines and promote it to international markets

Corporate Profile Currently offers 14 proprietary Chinese medicine products

effective for a wide range of ailments

Name of product

Enterofit ( 排毒健美丸 )

Gynecotonic I ( 天山雪蓮白鳳丸一號 )

Allergirid ( 花粉丸 )

Livertone ( 片黃疏肝丸 )

Lipidease ( 降脂血壓丸 )

Diabecure ( 糖尿靈 )

M-vivitonic ( 男寶 )

Rheumate ( 風濕鎮痛丸 )

Longevital ( 延壽蔘茸丸 )

Ranadin ( 靈芝益腎丸 )

Cardiaid ( 養心丹 )

Beneficence II ( 中國二號抗癌丸 )

Gynecotonic II ( 天山雪蓮白鳳丸二號 )

Detox Plus ( 清熱解毒丸 )

Products sold through :

- specialty retail outlet, Kanpoyakudo ( 漢方藥堂 ) in Hong Kong

- mail order services

- Internet

- Treasure 21C Club

Corporate Profile

6,900-page, multi-language health portal, www.newchinesemedic.com

Corporate Profile

Enlarge customer base via “e-customer referral program” – Treasure 21C Club

A reward scheme for members to enjoy discounts and commissions on purchase made by their referrals

The club has 15,000 members and the number is growing

Extend B2B business via Internet trading – “Medicine Street”

Obtain authorizations from three PRC Chinese medicine manufacturers to distribute products on-line

Corporate Profile

Business Partnership – R&D R&D assistance from its substantial shareholder –

Entered a 3-year R&D and management agreement with SRI inApril 2001

West China University of Medical Sciences

( 華西醫科大學 )

Sichuan University

( 四川大學 )

Sichuan Chinese Medicine Research Institute ( 四川省中醫藥研究院 )

Sichuan Research Institute of New Medicine, SRIStrong R&D support from

Corporate Profile

Business Partnership – R&D KNCM Biotech, joint venture with Canadian-based Kinetana

( 健諾國際 ), is principally engaged in:

R&D, marketing and distribution of self-developed products and herbal products to international markets

Sourcing, screening and standardization of Chinese herbs for western pharmaceutical companies via GLP Laboratories and the SimBioDASTM Technology

Designing and monitoring clinical testing procedures to facilitate product registration with the Food and Drug Administrationin the US and Ministry of Health in the PRC

Canadian-based Kinetana

( 加拿大健諾國際 )

Joint Venture Partner

Corporate Profile

Business Partnership - Manufacturing Manufacturing by Hu Qing Yu Tang ( 胡慶餘堂 ), a GMP compliant

pharmaceutical manufacturer in the PRC

Corporate Profile

成品Finished Product

GMP 企業生產示意圖 Procedure Sketch In A Certified GMP Manufacturer

實驗室檢測( 農藥殘留、重金屬、

砷鹽、衛生學檢查 )Lab Testing

(Pesticides Residue, Heavy Metals, Arsenic &

Microbial Limit Tests)

原料( 中藥飲片 )

Material(Herbal Slice

s)

提取( 提取設備 )Extraction

(Extracting Apparatus)

濃縮( 多效濃縮器 )Concentration(Multistage Co

ncentrating Machine)

干燥( 低溫干燥櫃 )

Drying (Low Temperature D

ryer)

粉碎( 粉碎機 )

Pulverization(Pulverizer)

填充膠囊( 膠囊自動填充機 )

Capsulizing(Auto-filler for Cap

sules)

質量監控( 高效液相層

析 )Quality Control

(HPLC)

包裝( 全自動包裝生產綫 )

Packing(Automatic

Packaging Line)

GMP Manufacturer

Industry Overview

Industry Overview Steady growth in world medicine market sales forecasts

Source: China Medication Economic and Trading Year 2000, Issue No. 3

World Medicine Market Sales Forecast 1998-20021998 Sales 2002 Sales Compound

(US$ billion) (US$ billion) Growth Rate (%)

118.4 164.0 9.8

79.3 99.6 5.8

40.2 48.8 4.9

23.2 32.0 8.4

13.2 20.1 11.0

5.6 9.0 12.4

5.3 7.4 8.6

7.0 10.5 10.6

4.7 5.3 3.3

5.2 7.2 8.6

3.7 5.3 9.8

2.7 3.2 6.7

North America

Europe

Japan

Latin America

Southeast Asia

PRC

Eastern Europe

Middle East

Africa

India

Australia

Commonwealth of Independent States

Total 302.9 411.9 Average: 8.0

Industry Overview The number of visitor arrival at the PRC is steadily growing

Source: The Year Book of China Tourism Statistics 2001, National Tourism Administration of the People’s Republic of China

Annual visitor arrivals and tourism receipts in the PRC 1990 – 2000

Arrivals (Thousand)

Receipts (US$Million)

14099

28452218

3947

4683

73238733

10200

1207412602

16224

83444

2746233350

3811541527

43684 4638751127

5758863478

72796

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Financial Highlights

Financial HighlightsTurnover

0

10,000

20,000

30,000

40,000

2000 2001

Year ended 31st March

Four months ended

31st July, 2001

HK$’000

10,168

34,09637,196

Financial HighlightsTurnover by Major Products

片黃疏肝丸 Livertone

7.8%Gynecotonic I

27.4%

花粉丸 Allergirid 14.

6%

Others 27.0%

Enterofit 23.2%

Livertone 8.1% 花粉丸 All

ergirid 16.4%

Gynecotonic I 20.0%

Enterofit 23.0%

Others 32.5%

2000 2001

排毒健美丸排毒健美丸

天山雪蓮白鳳丸一號天山雪蓮

白鳳丸一號片黃疏肝丸

其他 其他

Financial HighlightsProfit Attributable to Shareholders

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2000 2001

Year ended 31st March

Four months ended

31st July, 2001

HK$’00014,305

5,110

1,691

Future Plans and Prospects

Expand Research & Development Capabilities Further expand R&D capabilities via the cooperation with S

RI and Kinetana

Enlarge Product Range Increase the number of products to 40, consisting propriet

ary Chinese medicine products and health supplement products

8 new health supplement products are intended for diabetes, hyperlipidemia, hypertension, obesity, pollinosis, constipation and strengthening the liver and stomach will be launched in the first quarter of 2002

Future Plans and Prospects

Future Plans and ProspectsExpand Distribution Network Expand the distribution network in the PRC via the settin

g up of outlets in Beijing, Hangzhou and Xian Sales at the Hong Kong outlet reached HK$34.1 million

for the year ended 31st March 2001 4 outlets will generate more sales

Hangzhou

Beijing

Xian

Hong Kong

No. of visitor arrivals in 2000

- Beijing 2.8 million

- Hangzhou 707,000

- Xian 641,000

Source: The Year Book of China Tourism Statistics 2001, National Tourism Administration of the People’s Republic of China

Future Plans and ProspectsExpand Distribution Network (cont’d) PRC outlets

Hangzhou – first half of 2002 Beijing – second half of 2002 Xian – first half of 2003

Overseas markets Set up distribution networks in Korea, Australia and

New Zealand Expansion to North American market via the joint venture

with Kinetana, an experienced company in the region

Future Plans and ProspectsEnlarge Customer Base “e-customer referral program” - Treasure 21C Club which now has 15,000 members Set up membership centres in Japan

15,000 Membership

15,000 + Monthly Growth Factor + 1 New Retail Outlet

15,000 + Monthly Growth Factor + 2 New Retail Outlets

15,000 + Monthly Growth Factor + 3 New Retail Outlets

Now 2002Jan

2002

2002 - 2003

2003 - 2004

Membership Growth Trend

Future Plans and ProspectsDevelop New Income Stream Develop the wholesaling business via “Medicine Street”

Provide On-line Education and Information Provide on-line education, consultation and information on

Chinese medicines

Investment Highlights

Investment Highlights

New Chinese Medicine (“NCM”) - modernize traditional Chinese medicines and promote it to international markets

High-level research and development capabilities Expanding customer base and multiple sales growth New products will soon be launched GMP compliant manufacturer – Hu Qing Yu Tang Joint venture with Canadian-based Kinetana

Listing Details

Proposed Use of ProceedsThe net proceeds of the Share Offer, after deducting related expenses, is estimated to be about $27.0 million.

HK$ million

Expansion of research and development 6.5 capabilities and product lines for proprietary Chinese medicines and health supplement products

Expansion of distribution network 14.5

Extension of the business into e-commerce 5

Expansion of the Hong Kong office 0.5

General working capital 0.5

New Issue Statistics

No. of Placing Shares 50 million shares

No. of Public Offer Shares 10 million shares

Total Shares Under Offer 60 million shares

Issue price HK$0.60 per share

Issue size HK$36 million

Market capitalization HK$276 million

Historical price/earnings multiple 46.2 times

Pro forma adjusted net tangible assets value per share HK8.57 cents

Offering Timetable

February 25, 2002 IPO Begins

February 28, 2002 IPO Ends

March 5, 2002 Allotment Announcement

March 7, 2002 Listing Date