09:40     JIWA BIO-PHARM<02327> - Announcement (1)                            

    The Stock Exchange of Hong Kong Limited takes no responsibility           
    for the contents of this announcement, makes no representation            
    as to its accuracy or completeness and expressly disclaims any            
    liability whatsoever for any loss howsoever arising from or in            
    reliance upon the whole or any part of the contents of this               
    announcement.                                                             
                                                                              
    Jiwa Bio-Pharm Holdings Limited                                           
    *                                                                         
    (Incorporated in Bermuda with limited liability)                          
    (Stock code: 2327)                                                        
                                                                              
    DISCLOSEABLE TRANSACTION                                                  
    INVESTMENT IN YUNNAN PHARMACEUTICAL MATERIALS LIMITED*                    
                                                                              
    Summary                                                                   
                                                                              
    On 26 May 2005, Jiwa Pharmaceuticals entered into the Share               
    Transfer Agreement with the Vendor, pursuant to which Jiwa                
    Pharmaceuticals agreed to acquire from the Vendor a 23.81%                
    interest in YPML for a consideration of RMB5,300,000 (equivalent          
    to approximately HK$5 million).                                           
                                                                              
    YPML is currently owned as to 54.76% by CPMG, as to 21.43% by             
    YPGL and as to 23.81% by the Vendor. Upon completion of the               
    Acquisition, YPML will be owned as to 54.76% by CPMG, as to 21.43%        
    by YPGL and as to 23.81% by Jiwa Pharmaceuticals. There is no             
    restriction on any subsequent disposal of the 23.81%                      
    shareholding interest in YPML by Jiwa Pharmaceuticals.                    
                                                                              
    The Acquisition constitutes a discloseable transaction for the            
    Company under Rule 14.06 of the Listing Rules. A circular                 
    containing details of the Acquisition will be despatched to the           
    Shareholders as soon as practicable in accordance with the                
    requirements of the Listing Rules.                                        
                                                                              
    THE SHARE TRANSFER AGREEMENT                                              
                                                                              
    Date    26 May 2005                                                       
                                                                              
    Parties                                                                   
                                                                              
    Vendor: * (Employees' Shareholding                                        
    Association of YPML*), a collective enterprise established in             
    the PRC (see Note).                                                       
                                                                              
    Purchaser:      Jiwa Pharmaceuticals Limited, a company                   
    incorporated in Hong Kong with limited liability and a                    
    wholly-owned subsidiary of the Company.                                   
                                                                              
    Note 1: According to the opinion of the Company's PRC legal               
    advisers, the Vendor, as a collective enterprise, does not enjoy          
    the status of a legal person under the PRC laws. Since there              
    is no laws or regulations governing transfer of shares by such            
    collective enterprises in the PRC, the Company will bear a                
    certain degree of risks when entering into the Share Transfer             
    Agreement with the Vendor.                                                
                                                                              
    To the best of the Directors' knowledge, information and belief           
    having made all reasonable enquiry, each of the Vendor and its            
    ultimate beneficial owners is third party independent of the              
    Group and connected persons (as defined in the Listing Rules)             
    of the Group.                                                             
                                                                              
    Consideration                                                             
                                                                              
    The consideration payable by Jiwa Pharmaceuticals is                      
    RMB5,300,000 (equivalent to approximately HK$5 million), which            
    was arrived at after arm's length negotiations among the parties          
    and has been determined with reference to the previous capital            
    contribution by the Vendor at a discount. The Directors believe           
    that since significant