Sinopharm Tech entered into the Licensing and Master Service Agreement with anti-counterfeiting device service provider

HONG KONG,July 5,2021 --Sinopharm Tech Holdings Limited ("Sinopharm Tech" and its subsidiaries,together,the "Group",stock code: 8156) is pleased to announce that,Shenzhen Guoke Anti-counterfeiting TechnologyCompany Limited,a direct wholly-owned subsidiary of Sinopharm Tech (as the Licensee) entered into the Licensing and Master Service Agreement in relation to the provision of the Total Solutions on anti-counterfeiting device product with Shenzhen Ficus Technology Holdings Ltd. (as the Licensor) yesterday. The Licensing and Master Service Agreement commenced today,unless terminated in accordance with provisions of clauses of the Licensing and MasterService Agreement,continue in full force and effect until 30 June 2024.

The Group is actively exploring the anti-counterfeiting market and has experience in welfare and sports lottery industries for years. In the past twoyears,the Group has focused on the opportunities in the growing anti-counterfeiting market. In 2019,the Group started the discussion and exploring the sales of anti-counterfeit for goods andonline anti-counterfeiting information verification platform to the marketand has achieved concreteresults. The Group has contracted with three brandowners in the tea leaves,natural food and cosmetics e-commerce platform industries for theapplication of the Devices on the brand owners' products and shall be required to deliver theDevices in accordance with the agreements entered into. Therefore,the Group is underactual demand to obtain authorization from the Licensor for the use of the Total Solutionsand the Devices to comply with the requirement of necessary approval for conducting therelevant business and support.

The Terms and Conditions of the Licensing and Master Service Agreement

Subject to the terms and conditions of the Licensing and Master Service Agreement,the Licensor agrees to provide the following services (collectively the "Total Solutions") to the Licensee from time to time which including to:(i) grant the Licensee during the term of the Licensing and Master Service Agreement,anexclusive and royalty-bearing license to the Patents to use,sell,and offer to sell the Devices in the PRC; and(ii) provide services in relation to (a) design,production arrangement,material procurement and quality control,and customisation service of the Devices pursuant to the specification required by the Licensee and with the quality satisfactory to the Licensee at reasonable costs under each individual purchase order,and (b) design,development and customization of the online anti-counterfeiting information verification platform and the relevant services based on the Licensed Patents Rights.

Exclusivity

The License granted by the Licensor to the Licensee is on an exclusive basis as far as itrelates to the State-owned Enterprise Customers only. The Licensor is not entitled to licensethe Patents and Devices to any third parties for the supply of Devices or Total Solutions toany State-owned Enterprise Customer or contract directly with any State-owned EnterpriseCustomer for such supply.

The Proposed Annual Caps

The Board proposes the Proposed Annual Caps under the Licensing and Master ServiceAgreement for each of the three years ending 30 June 2024 are HK$8.3 million,HK$8.8 million and HK$9.3 million respectively. The Proposed Annual Caps were determined by the Company after taking into account of (i)the potential demand of anti-counterfeiting lottery devices from the customers of the Groupbased on the relevant executed agreements and potential agreements to be entered intobetween the Group and its customers; (ii) the potential growing trend of theanti-counterfeiting lottery market in the PRC with reference to the generally optimisticprospect of the anti-counterfeiting market in the PRC; and (iii) other relevant principal termsunder the Licensing and Master Service Agreement.

Information on the Licensor

Shenzhen Ficus Technology Holdings Ltd. is a company incorporated in the PRC with limited liability and is the registered holder of the Patents,and is engaged in the business of provision of services in relation to the design,development and provision of anti-counterfeiting devices in the PRC.The Patents have been registered in the PRC (registration number are ZL 201921449828.X and ZL 201921579150.7),Japan (registrationnumber are 3229334 and 3229631) and Hong Kong (registration number are HK30032261 and HK30032942),and applications for registration in Taiwan,Indonesia,Korean and Malaysia are in progress.

Mr.CHAN Ting,Executive Director and Chief Executive Officer of Sinopharm Tech,said,"In recent years,there is a rapid development in the various consumer segments in China,especially for therise of mid-to-high-end market,which leads to an indication that there is a huge demand foranti-counterfeiting technology from brand owners. The agreement will further strengthen the anti-counterfeiting devices including the unique lottery component with the benefits ofuniqueness and credibility with criminal sanctions for counterfeiting lottery tickets.TheDevices are easily recognized by the consumers and welcomed by the brand owners. The Group will seize the opportunity to realize the growth of the recently developed business while creating new income streams for the Group."

About Sinopharm Tech Holdings Limited

Sinopharm Tech Holdings Limited is a company that provides integrated solutions on lottery and "Internet Plus",as well as the manufacturing of personal protective equipment. Sinopharm Techis engaged in (i) the provision of lottery-related services; (ii) Internet plus services (solution and supply chain); (iii) manufacturing and distribution of personal protective equipment; and (iv) other services. In 2019,the Group successfully introduced Sinopharm Traditional Chinese Medicine Co. Ltd.,a member of China Traditional National Chinese Medicine Co.,Ltd.,as one of the main strategic shareholders.

The Group has been deeply involved in China's welfare lottery and sports lottery industries for more than 20 years,and is committed to bringing different innovative solutions to the industry,from lottery systems to interactive marketing to the latest anti-counterfeiting business. The Group is being granted the licensed patent rights and being an exclusive distributor for supplying anti-counterfeiting devices to state-owned enterprise customers in PRC,paving the way for the Group to achieve the cross-industrial and cross-regional market penetration and make a profit.