On the evening of September 28th, Baiyunshan, a listed company under Guangzhou Pharmaceutical Group, and Nanjing Pharmaceutical Co., Ltd. (hereinafter referred to as "Nanjing Pharmaceutical") announced that Baiyunshan's Guangzhou Pharmaceutical Phase II Fund Equity Investment Partnership Enterprise (Limited Partnership) (hereinafter referred to as "Guangzhou Pharmaceutical Phase II Fund") plans to invest 749 million yuan to acquire 145 million non restricted shares of Nanjing Pharmaceutical held by Alliance Healthcare Asia Pacific Limited ("AHAPL"), accounting for 11.04% of the total shares of Nanjing Pharmaceutical. After the acquisition is completed, Guangzhou Pharmaceutical Phase II Fund will become the second largest shareholder of Nanjing Pharmaceutical.

According to the announcement, on September 26th, Guangzhou Pharmaceutical Phase II Fund signed a share transfer contract with AHAPL. The buyer and seller agreed to use the arithmetic mean of the daily closing prices of the target company for the 60 trading days prior to the signing date of the contract as the basis, and the price of the target shares was 5.18 yuan per share.

On the same day, Baiyunshan, Guangzhou Pharmaceutical Phase II Fund, and Nanjing Pharmaceutical jointly signed a strategic investment agreement. According to the agreement, the cooperation mainly includes three aspects: capital cooperation, cooperation in self owned industrial variety distribution channels, and cooperation in the field of traditional Chinese medicine.

At the level of capital cooperation, the parties to the agreement will cooperate at appropriate times based on business cooperation and capital operation needs, including but not limited to establishing joint ventures, strategic investments, equity investment funds, etc.

At the level of industrial collaboration and distribution channel cooperation, Baiyun Mountain and Nanjing Pharmaceutical will actively develop market expansion and channel sharing plans, integrate and optimize supply chain resources and logistics distribution networks, and establish a stable and efficient supply chain system; For our own industrial products, we will carry out market access and channel sales through effective mechanisms to enhance the level of industrial chain cooperation. In terms of cooperation in the field of traditional Chinese medicine, both sides will actively support their respective Chinese medicine subsidiaries to promote the transformation and upgrading of the Chinese medicine industry, accelerate the standardization and modernization of Chinese medicine production processes and procedures; Collaborate to build a modern circulation system for traditional Chinese medicine, and establish a full chain traceability system for the cultivation, processing, and sales of traditional Chinese medicine.

In view of this, the transaction will be beneficial for Baiyun Mountain to further strengthen its business cooperation with Nanjing Pharmaceutical, optimize regional industrial layout, enhance the competitive advantage of pharmaceutical circulation business, and drive the growth of pharmaceutical manufacturing business, continuously promoting the company's business development.

It is reported that the Guangzhou Pharmaceutical Group's Phase II Fund, which is planned to invest, is a private equity investment fund established by Baiyunshan with a capital of 1.4985 billion yuan. It mainly invests in the biopharmaceutical and health fields such as pharmaceuticals, medical devices, and medical services through sub fund investments and direct project investments.

Pharmaceutical circulation is one of the core businesses of Guangzhou Pharmaceutical Group and Guangzhou Pharmaceutical Baiyun Mountain. Its subsidiary Guangzhou Pharmaceutical Co., Ltd., as the core enterprise of Guangzhou Pharmaceutical Group's pharmaceutical business sector, is a leading enterprise in pharmaceutical circulation in southern China, with steady revenue growth in recent years. For many years, Nanjing Pharmaceutical has been a leading enterprise in the pharmaceutical distribution industry in Jiangsu Province. Its main business focuses on pharmaceutical wholesale and retail, expanding rapidly in the East and Central China regions and continuously increasing its market share. Its pharmaceutical wholesale business has obvious advantages in Jiangsu, Anhui, Fujian, Hubei and other regions.

At present, the pharmaceutical distribution industry is showing a significant trend of centralization. According to Wind data, the top ten enterprises in the national pharmaceutical circulation market will have a market share of 82% by 2025. According to the 2024 list of the top 100 wholesale and retail enterprises in the pharmaceutical distribution industry, Guangzhou Pharmaceutical and Nanjing Pharmaceutical under Guangzhou Pharmaceutical Group ranked sixth and seventh respectively.

In the future, the linkage between the two sides will inject new momentum into regional network complementarity, supply chain technology collaboration, and emerging business expansion. At the same time, it is expected to further accelerate industry integration and promote the transformation of the pharmaceutical distribution industry from decentralized competition to specialization and scale.

It is worth noting that this acquisition is the first large-scale strategic investment project carried out by the new leadership team of Guangzhou Pharmaceutical Baiyunshan since taking office. It is also an important outcome of the new layout of Guangzhou Pharmaceutical Baiyunshan's production and investment integration. At the same time, it is also an innovative model for strengthening cooperation between Guangzhou Pharmaceutical Group and regional leading enterprises, sending a strong signal to the outside world that Guangzhou Pharmaceutical Group is strengthening its capital operation.