Stock Code: 000028/200028 Notice No.: 2019-31

Short Form of the Stock: Sinopharm Accord /Accord B

China National Accord Medicines Corporation Ltd.

Summary of Semi-Annual Report 2019

I. Important Notice

The summary of semi-annual report is excerpted from the full text of the semi-annual report. For the details investors should

carefully read the full text of the semi-annual report published on Juchao Information website (www.cninfo.com.cn) and Shenzhen

Stock Exchange Website etc. appointed by CSRC.Objection statement of directors supervisors and senior executives

Name Position Content and reason

Statement

Other directors attending the Meeting for annual report deliberation except for the followed

Name of director absent Title for absent director Reasons for absent Attorney

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) 25228147377.43 20778425602.22 21.42%

Net profit attributable to shareholders of

the listed company (RMB)

650833360.40 641727034.93 1.42%

Net profit attributable to shareholders of

the listed company after deducting

non-recurring gains and losses (RMB)

639700447.95 623296339.34 2.63%

Net cash flow arising from operating

activities (RMB)

1163757581.35 225357709.20 416.40%

Basic earnings per share (RMB/Share) 1.52 1.50 1.33%

Diluted earnings per share (RMB/Share) 1.52 1.50 1.33%

Weighted average ROE 5.44% 6.62%

Decline 1.18 percentage

points

End of current period End of last period

Increase/decrease in this

report-end over that of

last period-end

Total assets (RMB) 33539598682.94 28930300519.97 15.93%

Net assets attributable to shareholder of

listed company (RMB)

12140439917.48 11618432603.28 4.49%

3. Number of shareholders and share-holding

In Share

Total common shareholders at

period-end

19108

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

Hong Kong

Securities

Clearing

Overseas

corporate

4.33% 18521557

Company Ltd

HTHK/CMG

FSGUFP-CM

G FIRST

STATE

CHINA

GROWTH

FD

Overseas

corporate

2.68% 11469644

China

National

Pharmaceutic

al Foreign

Trade Corp.State-owned

corporate

1.24% 5323043 5323043

Fidelity

Investment

Management

(Hong Kong)

Limited -

Client’s fund

Overseas

corporate

1.07% 4582909

China United

Property

Insurance

Company

Limited –

Traditional

Insurance

Products

Domestic non

state-owned

corporate

1.01% 4313024

# Beijing

Haoqing

Fortune

Investment

Management

Co. Ltd. –

Haoqing

Value Stable

No.8

Investment

Fund

Domestic non

state-owned

corporate

0.96% 4118716

Central Huijin

Investment

Ltd.State-owned

corporate

0.89% 3804400

Basic

endowment

insurance

fund-

portfolio 1003

Domestic non

state-owned

corporate

0.77% 3294334

BBH BOS

S/A

FIDELITY

Overseas

corporate

0.76% 3246061

FD - CHINA

FOCUS FD

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

Yes

Retailing industry

In the first half of 2019 the growth rate of China's pharmaceutical market slowed dow n and the growth of major

terminals continued to differentiate the growth rate of primary medical care and retail terminals was higher than

that of hospital terminals. In the first half year the industrial policy continued to deepen the medical reform w ith

the core thoughts of "adjusting the structure strengthening the grassroots and strict supervision" and the pace of

reform in the medical field was accelerated; the "4+7" collection and linkage was rapidly advanced the national

medical insurance standardization work was officially launched the payment method reform pilot has been

advanced and the market regulation was becoming stricter.Under the new situation Sinopharm Accord conformed to the industry and policy trends maintained strategic

strength sought transformation and innovation and development and continuously promoted the strategic

measures and technological transformation with wholesale and retail integration as the core focused on four

business directions and created a "new" Guoda. Under the guidance and support of the company's board of

directors with the joint efforts of more than 25000 employees we focused on the increase in share and the scale

expansion the company's scale and growth rate in the first half of the year was better than the overall level of the

industry and achieved steady and rapid growth in performance.(i) Performance completion

In first half of 2019 Sinopharm Accord achieved a revenue from operation amounted as 25.228 billion Yuan with

a y-o-y growth 21.42%; net profit attributable to shareholders of parent company comes to 651 million Yuan with

1.42% up on a y-o-y basis. The distribution business has operation revenue of 19.477 billion Yuan with y-o-y

growth of 22.66%; net profit attributable to shareholders of parent company has 382 million Yuan with y-o-y

growth of 15.41%. Guoda Drugstore achieved a revenue from operation amounted to 6.108 billion Yuan with a

y-o-y growth of 18.75% and net profit attributable to shareholders of parent company amounted as 150 million

Yuan a 7.81% up on a y-o-y basis.(ii) The main work

1. Stabilize growth - performance improvement and scale expansion

The company actively grasped industry opportunities optimized investment M&A decision-making efficiency

accelerated industry resource integration and store network layout and ensured scale development. As of the first

half of the year the company had a total of 107 subsidiaries and the number of retail outlets of Guoda Drugstore

was 4593 with a net increase of 318 stores. During the reporting period the company invested in the

establishment of the Sinopharm Guoda Drugstore Bayannao’er Co. Ltd. Inner Mongolia Guoda Pharmaceuticals

Co. Ltd. and Sinopharm Guoda Drugstore Yongxingtang Chain (Chaoyang) Co. Ltd.

2. Promote strategy - integration of wholesale and retail and technology empowerment

The company researched and grasped environmental changes deepened the development plan for the next five

years and carried out strategic rolling revisions. With the core measures of "technology empowerment service

upgrading integration of wholesale and retail and industry and finance dual drive" we provided full-service

solutions for the upstream and downstream industry chain through customer value driving and upgrades of supply

chain model and transformed the pharmaceutical distributors into the solution providers and service providers so

as to create a leading international medicine health service platform.The company integrated resources to promote the synergy of wholesale and retail. In the first half of the year the

distribution launched the logistics planning of wholesale and retail integration and the sales of wholesale and

retail synergies increased by 54% on a year-on-year basis and the part outside of Guangdong and Guangxi

provinces increased by 64% on a year-on-year basis; Guoda Drugstore got supports from WBA global strategic

cooperation manufacturers’ resources and improved the Catalogue of Integration of Wholesales and Retails at the

same time promoted the construction of provincial platforms at present the provincial platform in Inner

Mongolia has been completed and the provincial platform project in Shenyang has passed the project approval.

Centering on the "digital transformation" the company launched IT planning promoted intelligent logistics and

intelligent supply chain optimization and energized the business development in multiple dimens ions.

3. Consolidate foundation - management upgrade risk control guarantee

The company straightened out the governance relationship of subsidiaries regulated the management of its

subsidiaries and enhanced its overall governance capabilities. The company optimized the organizational

structure created a diversif ied incentive mechanism improved the talent development system strengthened

leadership stimulated organizational vitality and innovation and promoted organizational management

transformation. The headquarters gave play to resource allocation and control functions strengthened professional

capabilities improved service awareness implemented risk prevention and control and escorted the business

development. We promoted key projects such as controls of claims and inventory balances loss -making enterprise

governance and innovation first and improved quality and efficiency for healthy development.

4. Promote transformation – service driven model innovation

Distribution business: The company maintained strategic strength actively responded to changes in market

policies and consolidated the integrated operational foundation the four major businesses developed rapidly and

built new competitive advantages. In the first half of the year traditional bus iness grew by 22% on a year -on-year

basis retail direct sales increased by 30% on a year-on-year basis equipment consumables increased by 52% on a

year-on-year basis retail medical treatment increased by 80% on a year-on-year basis and primary care increased

by 34% on a year-on-year basis.

(1) The company actively responded to environmental changes strengthened communication with the government

responded to the government's demand for medical reform actively participated in and provided professional

advice to enhance the company's influence. In terms of GPO policy Guangzhou Company completed bargaining

reports for seven batches of products and the bargaining list coverage rate reached 91% at the same time it

actively took countermeasures against new GPO areas such as Meizhou Heyuan Shanwei and Maoming. In the

implementation of "4+7" quantity procurement with the professional service capability and network coverage

advantage Shenzhen Company has obtained distribution r ights of 22 varieties accounting for 84%; Guangzhou

Company has obtained distribution r ights of 24 varieties accounting for 96%.

(2) Retail direct sales business: combined with the characteristics of retail terminals continued to promote

customer expansion regional sinking and actively promoted the integration of wholesale and retail and the

platform construction. In terms of sales growth in the first half of 2019 the retail direct sales business achieved

rapid growth among them retail pharmacy customer sales increased by 40% on a year-on-year basis and

small-scale private medical sales increased by 29% on a year-on-year basis. Actively integrated Guoda chain and

private single-store and small chain resources and promoted the construction of the core network of the terminal

network member store + the hospital circumjacent store through the "network self-built + cooperative

development" dual-track mode and continued to expand the construction of the third terminal medical network. In

terms of B2B platform construction and service innovation the company built OTC resource platforms realized

online payment of B2B platform upgraded member management functions optimized APP module construction

focused on end customer needs and created special services.

(3) Retail medical treatment business: Continued to promote the distribution of professional pharmacies in

Guangdong and Guangxi and sales have increased signif icantly. In the first half of the year the sales revenue of

professional pharmacies in the first half of the year increased by 80% and 13 new pharmacies were opened.

Currently the distribution points in 20 cities of Guangdong and 12 cities of Guangxi have been completed. As of

June there were 29 hospital circumjacent pharmacies with sales growth of 122% on a year-on-year basis and 25

DTP pharmacies with sales growth of 60% on a year-on-year basis. While advancing the layout of professional

pharmacies we have continuously obtained various types of medical insurance qualif ications: in the first half of

2019 Shenzhen Pharmacy and Hexie Road Pharmacy became the major and serious disease supplementary

medical insurance drug retail pharmacies of Shenzhen; Huizhou Pharmacy obtained the qualification of serious

disease medical insurance of Huizhou while Zhuhai Pharmacy has obtained the qualif ication of additional

supplementary medical insurance project.

(4) Equipment consumables business: With the gradual advancement of medical reform policies the medical

device industry supervision has become increasingly strict and the management advantages of distribution for the

device business have emerged. In the first half of 2019 the sales of equipment business increased by more than

50%. In the sales of equipment combined with the needs of hospitals continuously improved the viscosity of

hospital customers through platform construction and deep personalized service formed a variety of SPD project

customized solutions and promoted through the creation of SPD model hospital; explored medical supplies

counter sales and consignment sales model and promoted the hospital bidding process; the sales of SPD projects

in the first half of the year increased by 181% on a year-on-year basis.In addition it actively acquired the qualifications for wholesales and retails of medical devices developed retail

medical device models and improved retail business processes and retail system platforms in addition expanded

4D business around the supply chain service upgrades the businesses of new type of business company (including

equipment consumables equipment management disinfection center etc.) have been gradually carried out in an

orderly manner.Guoda Drugstore: Promote the company's brand upgrade optimize the management foundation strengthen the

professional pharmacy service capabilities and create new models.

(1) According to the company's strategic planning and deployment implement the new brand strategy

successively complete the "Guoda" upgrades and "Guozhi" brand integration plan expand the brand upgrade

ideas form a number of landing plans and continue to promote brand upgrades in the second half of the year.

(2) The "New Concept" pilot pharmacy jointly launched by Guoda Drugstore and Walgreens Boots Alliance

opened on January 20

th

at Shangnan Road Pudong New District of Shanghai. Up to now sales have increased by

34.8% on a year-on-year basis and the number of transactions has increased by 31.5% on a year-on-year basis.

The pilot pharmacy has integrated and implemented a new business operation model with advanced design and

operation management concept of Walgreens Pharmacy and Boots Pharmacy. Introduced varieties and cooperated

with a number of global brand suppliers set parameters vital signs detector and the touch advertising machine

provided physical intelligent detection and online drug purchasing services; launched "cloud hospital" project

sothat customers can experience internet medical services such as remote consultation electronic kitchen chronic

disease management self-test medication and appointment registration.

(3) Professionalization of pharmaceutical service capabilities. Strengthened professional competence and carried

out training courses for licensed pharmacists; opened Elearning platform to promote online learning; carried out

the "Guoda Drugstore Service Improvement" project; explored a sustainable and replicab le basic service

management system.

(4) Built an Internet + medical e-commerce model. Improved the value-added service system optimized the

self-operated OTO platforms such as WeChat Mall and APP created a pharmacy + Internet O2O model enhanced

the front-end customer experience and launched the e-commerce national customer service. In the first half of the

year the number of effective members nationwide was 11.436 million an increase of 8% over the same period

last year.

5. Strengthen party building - party building is strong foundation don’t forget the initial heart

Guided by the party's political construction strengthened the theme education of "not forgetting the initial heart

keeping the mission in mind" and the special action of "party building is strong foundation" focused on the

company's development strategy and central tasks focused on the consolidation of basic organization basic

team and group organization construction.

6. Cultivate internal strength - cultural practice and sedimentary accretion of brand

Carried out various cultural activities gathered heart and strength together promoted corporate culture

propaganda and practice focused on brand building gave play to brand value and cultivated the driving force of

enterprise development. Sinopharm Accord Corporate Culture Communication Project won the Best Learning

Project Award in the China Talent Development Elite Award (2018-2019). At the same time Sinopharm Accord

also won the 16

th

"Shenzhen Famous Brand" and the excellent enterprise in Guangdong Province and also won

the most social responsibility award of Gelonghui's 2019 A-share listed companies.

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

On December 7 2018 the Ministry of Finance issued the revised "Accounting Standards for Business Enterprise

No. 21 - Leases" enterprises listed both domestically and overseas at the same time and enterprises listed overseas

and using IFRS or ASBE to prepare financial statements have implemented it since January 1 2019; other

enterprises that implement enterprise accounting standards shall come into force on January 1 2021. As the parent

company of the Company Sinopharm Group Co. Ltd. ("Sinopharm") is listed overseas (H shares) in order to

unify the accounting policy of the parent company Sinopharm the Company has implemented the new leasing

standards on January 1 2019. According to the new and old standards conversion requirements the enterprise

shall adjust the retained earnings at the beginning of the period and the amount of other related items in the

financial statements according to the cumulative impact number of the implementation of the standard for the first

time and the information for the comparable period shall not be adjusted. This accounting policy change has

increased the company's total assets and total liabilities and the asset-liability ratio on January 1 2019 was about

2.51 percentage points higher than it on December 31 2018. This accounting policy change is not expected to

have a significant impact on the company's owner's equity or net profit.

(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

Particulars about the change of consolidation range see Financial Report Note-VIII.

China National Accord Medicines Corporation Ltd.

Legal representative: Lin Zhaoxiong

24 August 2019