09:16     SINO BIOPHARM<01177> - 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.                                                             
                                                                              
    Sino Biopharmaceutical Limited                                            
                                                                              
    (Incorporated in the Cayman Islands with limited liability)               
    (Stock code: 1177)                                                        
                                                                              
    CONNECTED TRANSACTION                                                     
                                                                              
    FORMATION OF A JOINT VENTURE IN THE PRC                                   
                                                                              
    The Board announces that on 27 May, 2005, CTL (a wholly-owned             
    subsidiary of the Company), Lianyungang Runzi and Jiangsu Juxin           
    entered into the Joint Venture Agreement and the Joint Venture            
    Articles for the formation of a joint venture which will be held          
    as to 60% by CTL, 24% by Lianyungang Runzi and 16% by Jiangsu             
    Juxin respectively. The total registered capital of the Joint             
    Venture will be US$970,000 (approximately HK$7,566,000), which            
    will be contributed in cash as to US$582,500 (approximately               
    HK$4,543,500) by CTL, RMB1,920,000 (approximately HK$1,804,800)           
    by Lianyungang Runzi and RMB1,280,000 (approximately                      
    HK$1,203,200) by Jiangsu Juxin respectively. The portion of the           
    Group's contribution to the Joint Venture will be fully funded            
    by internal resources of the Group. Apart from the obligation             
    to contribute its share of the registered capital to the Joint            
    Venture, CTL has no other capital commitment to make contribution         
    to the Joint Venture under the Joint Venture Agreement and the            
    Joint Venture Articles. CTL is not required under the Joint               
    Venture Agreement and the Joint Venture Articles to provide any           
    guarantee to the Joint Venture. The Joint Venture will be engaged         
    in the wholesale distribution of the modernised Chinese                   
    medicines, chemical medicines and modern health-care products             
    produced by the Group.                                                    
                                                                              
    The Directors, including the independent non-executive                    
    Directors, consider that the terms of the Joint Venture Agreement         
    and the Joint Venture Articles, which were concluded by the               
    Parties after arm's length negotiations, are fair and reasonable          
    and are on normal commercial terms and the Joint Venture                  
    Agreement and the Joint Venture Articles are in the interests             
    of the Company and its shareholders as a whole.                           
                                                                              
    Jiangsu Juxin is owned as to approximately 51% by Jiangsu                 
    Agribusiness, a company which holds a 33.5% equity interest in            
    JCTT, a subsidiary of the Company. Hence, Jiangsu Juxin is an             
    associate of Jiangsu Agribusiness (being a substantial                    
    shareholder of the Company's subsidiary) and a connected person           
    of the Company within the meaning of the Listing Rules.                   
    Accordingly, the formation of the Joint Venture constituted a             
    connected transaction for the Company. As the applicable                  
    percentage ratios of the contribution of CTL to the Joint Venture         
    are below 2.5%, the transaction is only subject to the reporting          
    and announcement requirements and is exempt from the independent          
    shareholders' approval under Chapter 14A of the Listing Rules.            
                                                                              
                                                                              
    THE FORMATION OF THE JOINT VENTURE                                        
                                                                              
    On 27 May, 2005, CTL, Lianyungang Runzi and Jiangsu Juxin entered         
    into the Joint Venture Agreement and the Joint Venture Articles           
    for the formation of a joint venture