On 16 December 2015, Shanghai Fosun Hospital Investment (Group) Company Limited (“Fosun Hospital Investment”), a wholly-owned subsidiary of China’s leading pharmaceutical and healthcare company Shanghai Fosun Pharmaceuticals Company Limited (“Fosun Pharma”), has entered into an agreement with Qingdao City Construction Industrial Investment Company Limited (“Qingdao Industrial Investment”), pursuant to which both parties proposed to jointly establish Qingdao Shandong University Qilu Hospital Investment Management Company Limited (tentative name, the “New Company”).

According to the agreement, the registered capital of the New Company is proposed to be RMB800 million, with Fosun Hospital Investment and Qingdao Industrial Investment investing in RMB400 million in cash respectively, which hence accounts for 50% of the registered capital of the New Company respectively. Upon the establishment of the New Company, it will take charge in the engineering project construction of Qingdao Shandong University Qilu Hospital Phase II Campus, and will establish and operate Qingdao Chengxing Hospital (tentative name). The Phase II Campus will be constructed in accordance with third-grade hospital standards. Upon the completion of the construction, Qingdao Chengxing Hospital will rent the campus for providing healthcare services. Qingdao Chengxing Hospital is proposed to be a non-profit medical institute, which plans to provide approximately 1,600 bed units.

Qingdao Industrial Investment, established in July 2015 with a registered capital of RMB1 billion, currently is a wholly-owned subsidiary of Qingdao City Construction Investment (Group) Limited.

Being one of the enterprises entering the healthcare service market at the earliest stage, Fosun Pharma has preliminary established a strategic deployment of healthcare services segment with high-end healthcare institution represented by United Family Healthcare in the coastal cities and specialty and general hospitals in second-tier and third-tier cities. In December 2015, “Wenzhou Geriatrics Hospital”, a 3A-level geriatrics specialty hospital jointly established by Fosun Pharma and Wenzhou Hospital of Chinese Medicine, has become the first project cooperated with hospital of mixed-ownership.

The management team of Fosun Pharma expressed that, the cooperation with Qingdao Industrial Investment is a breakthrough in exploring cooperative models with large-scale local state-owned enterprises, public hospitals and affiliated hospitals of universities. Such cooperation will give full play to Shandong University Qilu Hospital’s advantages of aspects including management, technology and talents, which may provide trainings pertaining to management and technology and opportunities of further studies for relevant hospitals of Fosun Pharma Group, and assist in developing its key hospital departments. Meanwhile, such cooperation will further improve the regional deployment of Fosun Pharma Group’s healthcare services sector, and thereby accelerate the development of its healthcare service business.