Shanghai Pharma Global Standard Stock Incentive Scheme to Push Innovation Refiled for Approval

SHANGHAI,Oct. 1,2019 -- Shanghai Pharmaceuticals Holding Co.,Ltd. (Shanghai Pharma)(Hong Kong Stock Exchange: 2607) (Shanghai Stock Exchange: 601607) has launched a new stock incentive plan (the Plan) aligned with international standards aimed at retaining and attracting talent while propelling the Chinese healthcare conglomerate into a world-class pharmaceutical innovator.

It's the second time Shanghai Parma has presented a stock incentive scheme as it begins to enhance the Company's corporate structure amid continued expansion. Awaiting approval from shareholders on EGM,the plan includes higher performance assessment guidelines designed to enhance Shanghai Pharma's efforts to build world-class research capabilities – the ultimate ingredient of success in China's increasingly competitive,and rapidly evolving biotech industry.

Shanghai Pharma,which is dual-listed in Shanghai and Hong Kong,plans to award options on 28 million mainland-traded A shares,or 1% of its capital base,to 211 individuals,including senior management,mid-level managers,and core technology and business staff. As manifestation of best practice of corporate governance,participants are excluded from resolution and administration of the Plan all throughout.

Under the Plan,options are granted upon approval by EGM,after which participants can exercise their rights in three phases at 24,36 and 48 months. Each phase lasts 12 months and participants can choose to buy roughly one-third of the allotted shares.

Certain conditions must be met - annual compound revenue growth must exceed 10% during the 2020-2022 period; net profit must trend higher; and in the individual years,R&D expenditure must reach at least RMB940 million,1 billion,and 1.06 billion,respectively. In addition,return on equity (ROE) must meet targets of 12.1%,12.3% and 12.5%,respectively during the three years. Both R&D expenditure and ROE target are higher compared to the scheme in June 2019,showcasing Shanghai Pharma's great confidence in future performance.

The incentive scheme is evidence that Shanghai Pharma,which registered a compound growth rate of 19.29% in R&D expenditure from 2011 to 2018,continues to accelerate its investment in innovation to gain a competitive edge within the industry.

The focus on innovation has already born fruit. During the first half of 2019,Shanghai Pharma's profit recorded double-digit growth,with over half of the contribution coming from the drug making sector.

Stronger Global Collaboration for Innovative Treatments

In another push toward innovation,Shanghai Pharma set up a US$400 million China-based joint venture,including the permanent and exclusive rights to three biosimilars and three innovative biopharmaceutical products,with Russian drug innovator BIOCAD to pursue bio-discovery and the manufacture of cutting-edge treatments.

Going forward,Shanghai Pharma plans to leverage this exclusive platform to extend and diversify its R&D pipeline,thereby leapfrogging in the intensely competitive biotech race. In the next three years,Shanghai Pharma aims to increase its R&D investment from 7% of sales from pharmaceutical manufacturing to 10%.

About Shanghai Pharmaceuticals (Shanghai Pharma)

Shanghai Pharmaceuticals Holding Co.,Ltd. ("Shanghai Pharma" or the "Company") (Hong Kong Stock Exchange: 2607) (Shanghai Stock Exchange: 601607) is a leading pharmaceutical group with business extending across the entire value chain. The Company is engaged in the research and development,manufacturing,distribution and retail of pharmaceutical products and innovative healthcare services. From 2011 to 2018,the Company's revenue and EBITDA sustained growth at CAGR of 16.41% and 13.76%,reaching RMB159.1 billion and RMB7.2 billion,respectively. Shanghai Pharma is ranked third among Chinese pharmaceutical groups,according to Forbes 2019 Global 2000.

For more information,please visithttp://www.sphchina.com/.

View original content:/news-releases/shanghai-pharma-global-standard-stock-incentive-scheme-to-push-innovation-refiled-for-approval-300927581.html