Stock Code: 000028/200028 Notice No.: 2018-35

Short Form of the Stock: Sinopharm Accord /Accord B

China National Accord Medicines Corporation Ltd.

Summary of Semi-Annual Report 2018

I. Important Notice

The summary is abstract from full-text of annual report for more details of operating results financial condition and future

development plan of the Company; investors should found in the full-text of annual report that published on media appointed by

CSRC.

No objection statement of directors supervisors and senior executives

Whole directors attended the Meeting in person for Report deliberation

Prompt of modified auditing opinion

□ Applicable √ Not applicable

Profit distribution pre-plan of common stock or capitalizing of common reserves pre-plan deliberated by the Board in the reporting

period

□ Applicable √ Not applicable

The Company plans not to carry out cash dividend and bonus distribution and capitalizing of common reserves

Profit distribution pre-plan of preferred stock deliberated and approved by the Board in the reporting period

□ Applicable √ Not applicable

II. Basic information of the company

1. Company profile

Short form of the stock Sinopharm Accord Accord B Stock code 000028 200028

Stock exchange for listing Shenzhen Stock Exchange

Person/Way to contact Secretary of the Board Rep. of security affairs

Name Chen Changbing Wang Zhaoyu

Office add.

Accord Pharm. Bldg. No. 15 Ba Gua Si

Road Futian District Shenzhen Guangdong

Province

Accord Pharm. Bldg. No. 15 Ba Gua Si

Road Futian District Shenzhen Guangdong

Province

Tel. +(86)755 25875195 +(86)755 25875222

E-mail gyyzinvestor@sinopharm.com gyyz0028@sinopharm.com

2. Main financial data and index

Whether it has retroactive adjustment or re-statement on previous accounting data

□Yes √No

Current Period Same period of last year

Increase/decrease in this

report y-o-y

Operating income (RMB) 20779166699.67 20524807669.57 1.24%

Net profit attributable to shareholders of

the listed company(RMB)

641727034.93 556125318.19 15.39%

Net profit attributable to shareholders of

the listed company after deducting

non-recurring gains and losses(RMB)

623296339.34 546253390.00 14.10%

Net cash flow arising from operating

activities(RMB)

225357709.20 228337431.40 -1.30%

Basic earnings per share (RMB/Share) 1.50 1.30 15.38%

Diluted earnings per share (RMB/Share) 1.50 1.30 15.38%

Weighted average ROE 6.62% 6.41% 0.21%

End of current period End of last period

Increase/decrease in this

report-end over that of last

period-end

Total assets (RMB) 24013015677.32 22343643527.77 7.47%

Net assets attributable to shareholder of

listed company (RMB)

9910258628.12 9396572345.88 5.47%

3. Number of shareholders and share-holding

In Share

Total common shareholders at

period-end

19539

Total preference shareholders

with voting rights recovered at

end of reporting period (if

applicable)

0

Top ten shareholders

Full name of Shareholders

Nature of

shareholder

Proportion

of shares

held

Amount of

shares held

Amount of restricted shares held

Shares pledged/frozen

State of share Amount

Sinopharm Group Co.Ltd

State-owned

corporate

56.06% 239999991 55057700

HTHK/CMG

FSGUFP-CMG FIRST

STATE CHINA

GROWTH FD

Overseas

corporate

2.37% 10141182 0

China Life Insurance Co.

Ltd. – tradition –general

insurance products

-005L-CT001 Shen

Domestic

non

state-owned

corporate

2.02% 8654592 0

China United Property

Insurance Company

Domestic

non

1.42% 6092905 0

Limited – Traditional

Insurance Products

state-owned

corporate

China National

Pharmaceutical Foreign

Trade Corp.State-owned

corporate

1.24% 5323043 5323043

GUOTAI JUNAN

SECURITIES(HONGKO

NG) LIMITED

Overseas

corporate

1.19% 5086260 0

New China Life Insurance

Co. Ltd. – Bonus –

Individual bonuses -

-018L-FH002 Shen

Domestic

non

state-owned

corporate

0.98% 4199772 0

# Beijing Haoqing

Fortune Investment

Management Co. Ltd. –

Haoqing Value Stable

No.8 Investment Fund

Domestic

non

state-owned

corporate

0.96% 4118716 0

UBS AG LONDON

BRANCH

Overseas

corporate

0.89% 3818884 0

Central Huijin Investment

Ltd.State-owned

corporate

0.89% 3804400 0

Explanation on associated relationship

among the aforesaid shareholders

Sinopharm Group Co. Ltd. and China National Pharmaceutical Foreign Trade

Corporation have the same actual controller which is China National Pharmaceutical

Group Corporation. It is unknown that there exists no associated relationship or belongs to

the consistent actionist among the other tradable shareholders regulated by the

Management Measure of Information Disclosure on Change of Shareholding for Listed

Companies.

Explanation on shareholders involving

margin business about top ten common

stock shareholders with un-restrict

shares held (if applicable)

Beijing Haoqing Fortune Investment Management Co. Ltd. – Haoqing Value Stable No.8

Investment Fund holds shares of the Company through margin trading and negotiable

securities account that is 4118716 shares in total.

4. Changes of controlling shareholders or actual controller

Changes of controlling shareholders in reporting period

□ Applicable √ Not applicable

Changes of controlling shareholders had no change in reporting period.

Changes of actual controller in reporting period

□ Applicable √ Not applicable

Changes of actual controller in reporting period had no change in reporting period.

5. Total preferred stock shareholders of the Company and shares held by top ten shareholders with

preferred stock held

□ Applicable √ Not applicable

The Company had no shareholders with preferred stock held in the reporting.

6. Corporate bonds

Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when

semi-annual report approved for released or fail to cash in full on due

No

III. Discussion and analysis by the Management Team

1. Introduction of operation in the reporting period

Whether the Company needs to comply with the disclosure requirements of the particular industry

Reference disclosure

Retailing industry

In the first half of 2018 Sinopharm Accord focused on a clear development strategy and clear goals transformed

both foreground and background innovated together and took serious measures to business landing and made

steady growth in business performance and showed potential in business models.(i) Performance completion in first half of 2018

Sinopharm Accord achieved a revenue from operation amounted as 20.779 billion Yuan with a y-o-y growth

1.24%; the net profit attributable to parent Company comes to 642 million Yuan with 15.39% up on a y-o-y basis.

The pharmaceutical distribution has operation revenue of 15.879 billion Yuan with y-o-y growth of 0.79%; net

profit attributable to parent Company has 333 million Yuan with y-o-y growth of 8.93%. As for the

pharmaceutical retail the Company gains 5.144 billion Yuan in operation revenue a y-o-y growth of 5.23% and

the net profit attributable to parent Company amounted as 139 million Yuan a 40.66% up on a y-o-y basis.(ii) Analysis of policy environment

1. Industry growth rate continued to slow down and the trend of leading concentration ratio remained unchanged

In the first quarter of 2018 the growth of drug distribution and sales increased by 7.9% a decline of 0.5% on a

year-on-year basis; the growth of drug retail and sales increased by 9.1% and an increase of 0.1% on a

year-on-year basis. The growth rate of large pharmaceutical wholesale enterprises slowed down noticeably the

main business income of top 100 wholesale enterprises increased by 8.4% in 2017 a decline of 5.6% on a

year-on-year basis; the top 100 market share was 70.7% a decline of 0.2% on a year-on-year basis; the market

share of 4 leading enterprises was 37.6% a rise of 0.2 % on a year-on-year basis.

2. The total number of medical institutions was expanding and the process of rational allocation of medical

resources was accelerating

Under the policy promoting more than 19000 new-level medical and health institutions have been added and the

growth rate of the number of medical treatments and inpatient number has far exceeded that of class hospitals and

the medical resources are constantly leaning toward the basic level.(iii) The main work completed by the Company in the first half of 2018

1. Integrated wholesale and retail and dug deep into resource advantages

During the reporting period the Company’s catalogue management of wholesale and retail integration variety

increased from 33 brands to 77 brands and the number of articles increased from 255 to 430. Through the

planning for wholesale and retail integration suppliers seven suppliers were promoted to boost the wholesale and

retail integration project at the same time further promoted the wholesale and retail cooperation project of Guoda

Drugstore.

2. Implemented information technology projects and strengthened new competence of technology

The Company attached great importance to the construction of IT talent team increased recruitment efforts

comprehensively strengthened the “informatization” orientation and established a matching performance

incentive mechanism. During the reporting period the Company optimized the basic management by information

technology created a dual information platform of “Hospital Supply Chain Management” and “Retail ProfessionalSupply Chain Management” and promoted the new business model through the integration of technology:

3. Organized the full docking with Walgreens Boots Alliance and the projects were implemented smoothly

After many times of communication and combining the research on the market the new term of board of directors

of the joint-ventured Guoda Drugstore reached a consensus on the strategic planning for the next 3-5 years and

formed specific strategic measures.

4. Distribution focused on four major directions transformation and innovation for development

(1) Primary care:

The Company actively responded to the “two-vote system” made overall plans made variety planning resource

docking and channel merging; improved the supply chain efficiency by building invoice management system

procurement tax refund process optimization multi-warehouse operation inventory management etc.; in order to

meet the business needs the Company established standardized prepayment and cash deposit operation

procedures to effectively control payment risks.In response to the “GPO” various regions and multiple channels actively proposed suggestions for the GPO

program and signed strategic cooperation framework agreements with Taishan HeYuan Maoming and other

places; actively affected the variety catalogue of Foshan implementation plans and strived to supplement the key

varieties improved the maximum match between the varieties and the implementation catalog; the GPOs in

Shenzhen and Dongguan entered the implementation stage and the Company maintained active communication

and responded well.The Company directly faced the pharmacy custody at various regions actively participated in the bidding of

various custody projects strengthened the front-end business management actively interpreted and responded to

the bidding work formulated the bidding tools and formed the standardization process of the universal template +

customized solution; and insisted on the individualized response in the hospitals in trust integrated the varieties

and business resources adjusted the cooperation models and maintained the share and improved the gross profit.

(2) Retail diagnosis and treatment:

During the reporting period there were 51 retail clinics including 10 ones newly established in Guangdong and

two ones newly established in Guangxi in the first half of the year. Foshan Pharmacy and Foyi Pharmacy became

the specific pharmacies in Foshan City. Shenzhen Pharmacy and Zhaoqing Pharmacy won the first batch of

“Guangdong Provincial Demonstration Pharmacies”.

5. Guoda Drugstore ensured stock and made increment and elaborately operated new features

(1) Accelerated the distribution speed according to strategic deployment

As of the end of the reporting period the total number of Guoda Drugstore reached 4004 and accumulatively had

a net increase of 169 stores in the first half of the year including 163 direct-sale stores. The distribution points of

advantageous areas were scattered strengthened the regional management formulated the implementation plan of

the store transfer shop model carried out help guidance on the spot and grasped the local policies through

analysis and continued to follow up. Guoda Drugstore pre-judged the policy changes and market trends and

increased the expansion speed of stores around hospitals. In the first half of the year 29 new stores around

hospitals were added and there were totally 332 stores around hospitals as of the end of the reporting period.

(2) Dug the potential benefits of stock stores and created specialized pharmacies with chronic diseases as the core

Optimized store management and managed the loss-making stores; established records and set up warehouses

implemented chronic disease services and membership management

(3) Implemented the integration strategy of wholesale and retail and strengthened the fine management of

merchandize purchase

Implemented the provincial-level platform construction of Guoda Drugstore step by step docked the project of

wholesale and retail integration implemented the strategic requirements completed the docking with

manufacturers and sought a new cooperation mode; carried through the fine management to merchandize

purchase and sales promoted the application planning guidebook and tapped the potential in inter-regional

benchmarking; focused on the category inside used the benchmarking method of same type of commodity to find

the superior goods and increased the sales quota of superior goods.

(4) Accelerate the exploration of e-commerce business new model

Guoda Drugstore has negotiated cooperation with a number of internet hospitals and reached a nationwide

cooperation agreement with Yaofangyun. At present the cooperation in Ningxia and Xiamen has already been

implemented.

2. Matters relevant to financial report

(1) Particulars about the changes in aspect of accounting policy estimates and calculation method

compared with the accounting period of last year

√Applicable □ Not applicable

I. General description of change of accounting policies

1. The Ministry of Finance amended Business Accounting Standards No.14 - Revenue on 5 July 2017

(CK[2017]No.22).

2. The Ministry of Finance amended Business Accounting Standards No.22 - Recognition and measurement of

financial instrument (CK[2017]No.7) Business Accounting Standards No.23 - Transfer of financial assets

(CK[2017]No.8) and Business Accounting Standards No.24 - Hedging accounting (CK[2017]No.9) on 31

March 2017 and amended Business Accounting Standards No.37 - Presentation of financial instruments

(CK[2017]No.14) on 2 May 2017.

The above amended standards are applicable to those enterprises listed on both domestic and overseas securities

markets and to those enterprises listed on overseas securities market where the international financial reporting

standards or business accounting standards are adopted to prepare financial statements with effect from 1 January

2018.

II. Reasons for and dates of change of accounting policies

1. On 5 July 2017 the Ministry of Finance issued the amended Business Accounting Standards No.14 - Revenue

which will be applicable for those enterprises listed on both domestic and overseas securities markets with effect

from 1 January 2018 while applicable to other domestic-listed enterprises since 1 January 2020.

2. On 31 March 2017 the Ministry of Finance issued the amended Business Accounting Standards No.22 -

Recognition and measurement of financial instrument Business Accounting Standards No.23 - Transfer of

financial assets and Business Accounting Standards No.24 - Hedging accounting and issued the amended

Business Accounting Standards No.37 - Presentation of financial instruments on 2 May 2017 (together referred to

as “New Series of Standards on Financial Instruments ”) which will be applicable for those enterprises listed on

both domestic and overseas securities markets with effect from 1 January 2018 while applicable to other

domestic-listed enterprises since 1 January 2019.

3. Due to that the parent of the Company is Sinopharm Group Co. Ltd. (“Sinopharm”) which is listed on overseas

market offering H shares the Company begun to implement the above standards since 1 January 2018 so as to

keep the same accounting policies with Sinopharm.III. Major changes in accounting policies and the influence upon the Company

(I)Change of accounting policy for revenue

1. Major changes of Business Accounting Standards No.14 - Revenue (CK[2017]No.22) are set out below:

(1)the current revenue and construction contract standards are incorporated into a unified revenue recognition

model;

(2)to replace the risk-and-reward approach with the transfer-of-control approach as the criteria for the time of

revenue recognition;

(3)to identify each single performance obligation included in a contract and recognize revenue separately when

performing the obligation;

(4)to provide a more prescriptive guidance including the accounting treatment of contract concerning multiple

trading arrangements;

(5)expressly formulates the revenue recognition and measurement of certain specific transactions (or matters).

2. Influence on the Company arising from this change

The Company will implement this new standard since 1 January 2018. According to the requirements during

transition of the old and new standards a company shall adjust the opening retained earning and amounts of other

related items in the financial statements based on the accumulative affected amount upon initial implementation of

this standard while make no adjustment to figures of comparative periods. Adopt of this standard will lead to

material change of revenue recognition method of the Company and will not materially affect net profit total

assets and net assets for the period and previous periods.(II)Changes in accounting policies for financial instruments

1. Major changes of Business Accounting Standards No.22 - Recognition and measurement of financial

instrument Business Accounting Standards No.23 - Transfer of financial assets Business Accounting Standards

No.24 - Hedging accounting and Business Accounting Standards No.37 - Presentation of financial instruments are

set out below:

(1)the classification of financial assets shall be based on “business model” for possessing the financial assets and

“contractual cash flow characteristics of financial assets” and financial assets shall be classified into three types

namely financial asset measured at amortized cost financial asset measured at fair value through other

comprehensive income and financial asset measured at fair value through profit or loss;

(2)the accounting policy for provision for impairment loss of financial assets shall change from the approach of

“incurred loss” to “expected credit loss” and the scope of provision is enlarged;

(3)with respect to non-trading equity instrument investment of financial assets at fair value through other

comprehensive income the portion which is included in other comprehensive income in subsequent measurement

cannot be transferred to profit or loss for the period when being disposed instead thereof direct adjustment to

retained earning;.

(4)the determination principle and accounting treatment of transfer of financial assets are further clarified;

(5)with respect to hedge accounting the qualified hedged projects and scope of hedge instruments are enlarged

with qualitative hedge effectiveness test requirement replacing quantitative requirements; introduce hedge relation

“re-balance” system;

(6)the disclosure requirements for financial instruments shall be adjusted accordingly.

2 Influence on the Company arising from this change:

(1)Sinopharm Guoda Drugstore Co. Ltd. a subsidiary of the Company holds shares in Shanghai Guoda

Shuguang Drugstore Co. Ltd. Shanghai Guoren Drugstore Co. Ltd. Sinopharm Hubei Guoda Drugstore Co.Ltd. Hunan Zhongbai Pharmacy Investment Co. Ltd. And Sinopharm Health Online Co. Ltd with the voting

right of 25% 10% 10% 6.31% and 8.06% respectively. However the directors and senior management of the

five companies are not appointed by the Group and the Group has not participated or affected their financial and

operating decisions or normal operating activities in other means. Therefore the Group exercises no significant

influence in the five companies which makes the Group to calculate them as available-for-sale equity instruments

at carrying value.

After adoption of the new amended financial instruments related standards the Company determines to designate

it as the financial asset at fair value through other comprehensive income after considering the contractual cash

flow characteristics and business model of the financial assets. These assets would be measured at fair value

through other comprehensive income in subsequent periods and would not be transferred to profit or loss in

subsequent periods. Upon derecognition of financial assets the accumulative gains or losses previously recorded

in other comprehensive income will be transferred out from other comprehensive income and recorded in retained

earning. This change of financial instruments related accounting policies will not materially affect the opening

retained earning and other comprehensive income of the Company for 2018 no need to make retrospective

adjustments.

(2)Under the original financial instruments standards the Company conducts check on carrying value of financial

assets on each balance sheet date and provides for impairment provision when there is objective evidence

indicating the financial asset is impaired. Objective evidence indicating a financial asset is impaired refers to an

event that is actually occurred after initial recognition of the financial asset which affects the predicted future cash

flow of the asset and the affect can be measured reliably by the company. The new financial instruments standards

adopt expected credit loss to measure impairment. Under the new impairment measurement the Company willneed to consider more expected loss risk. It shall recognize the “expected credit loss during the 12 months afterinitial recognition” first and recognize the “expected credit loss during the whole existence period” when thecredit loss increases significantly.

As for financial assets measured at amortized cost such as receivables the single financial asset with significant

amount is tested separately for impairment test and impairment provision is made based on the difference between

the present value of expected future cash flow less than the carrying value of the asset under the original standards;

the single financial asset not in significant amount and financial asset which is not impaired after separate test

shall make impairment test with incorporation into financial assets group with similar credit risk characteristics

and impairment provision is made under aging analysis method. Based on the Company’s judgment aging

analysis method may still be chosen to make impairment provision after adoption of the new financial instruments

standards and it is expected that it will not bring significant influence on the financial statements.This change of accounting policies brings no substantial influence on profit or loss total assets and net assets of

the Company.

(2) Particulars about retroactive restatement on major correction for accounting errors in reporting period

□ Applicable √ Not applicable

There is no particular about retroactive restatement on major correction for accounting errors in reporting period

(3) Particulars about the change of consolidation range compared with the accounting report of last year

√ Applicable □ Not applicable

Changes of consolidation range found more in annotation VIII

China National Accord Medicines Corporation Ltd.

Legal representative: Lin Zhaoxiong

24 August 2018