Tycoon Group Entered into a Strategic Cooperation Framework Agreement with China Resources Pharmaceutical and Guobiao

HONG KONG, Nov. 22, 2021 /PRNewswire/ -- Tycoon Group Holdings Limited ("Tycoon" or the "Company" and its subsidiaries (together, the "Group"), Stock Code: 3390), an omnichannel brand marketing and management service integrator of health and well-being related products in Hong Kong, is pleased to announce that on 22 November 2021, Tycoon Asia Pacific Group Limited, an indirectly wholly-owned subsidiary of the Company, has entered into a strategic cooperation framework agreement ("Framework Agreement") with China Resources Guangdong Pharmaceutical Co., Ltd ("CR Guangdong"), a non-wholly-owned subsidiary of China Resources Pharmaceutical Group Limited ("China Resources Pharmaceutical", Stock Code: 3320), and Hong Kong Guobiao Inspection and Testing Co., Ltd ("Guobiao"), The three parties reached a preliminary understanding in relation to the further extensive cooperation in various areas including provision of integrated services for research and development and full commercial scale production of medicines in Guangdong-Hong Kong-Macau and the Greater Bay Area ("Business Cooperation").

Cooperation of an Iron Triangle Helped Tycoon to Explore the Blue Ocean Market of Proprietary Chinese Medicine (PCM)

According to the Framework Agreement, the three parties agreed to achieve resources sharing, complement each other's advantages and hold regular meetings to facilitate cooperation and execution of the Agreements. Under the Agreement, Tycoon will arrange and ensure the sale channels of pharmaceutical and health products and coordinate cooperation with third parties in Hong Kong and Macau, supply comprehensive and premium brands of PCM which are representative in Hong Kong and Macau and strive to cover the Blue Ocean Market of PCM in Greater Bay Area (GBA); Guobiao will provide one-step service for quality standard research and registration; and testing and coordinate cooperation with third parties in China; and provide consultation services for entry of the pharmaceutical and health product market in Guangdong-Hong Kong-Macau and the GBA; CR Guangdong will leverage its advantage as pharmaceutical import platform for the GBA to extend its international supply chain services, exploring innovative supply chain service models with pharmaceutical enterprises and medical diagnostic devise companies and coordinate cooperation with third parties in Guangdong, China.

As a leading provider of a number of PCM, health supplement, skin care, personal care and other healthcare products, predominately in Hong Kong, Tycoon Group believes that the Framework Agreement can fully utilise the resources and advantages of the three parties in their respective fields, promote comprehensive cooperation between the parties and bring significant business opportunities to the Group's business in Guangdong-Hong Kong-Macau and the GBA. Based on the public's demand in China so as to select and provide the representative products of PCM for external use from Hong Kong and Macau, this is beneficial to the exploration of the Blue Ocean Market of PCM. The extensive network in China of China Resources Pharmaceutical and the professional service for testing of Guobiao guided Tycoon for entry of the pharmaceutical and health product market in Guangdong-Hong Kong-Macau and the GBA.

Background of the Cooperation

Supports from the policies of China and the HKSAR Government is the cornerstone of the establishment of the cooperation framework by the three parties. Earlier, the National Medical Products Administration ("NMPA") and eight other departments jointly issued the "Guangdong-Hong Kong-Macau Greater Bay Area Medicines and Medical Devices Regulatory Innovation and Development Work Plan", which proposed the foundational establishment of an institutional mechanism for medical institutions in the Guangdong-Hong Kong-Macau GBA to use medicines and medical devices sold in Hong Kong and Macau by 2022. It provoked overwhelming response among the industry. On 5th September 2021, the Secretary for Food and Health of the HKSAR Government, Professor Sophia Chan, said in the "New Dimensions of Development for Chinese Medicine – Briefing on the Measures of Integrating the Chinese Medicine Sector into Hong Kong and GBA" that Chinese Medicine was a crucial part in the healthcare systems of Hong Kong. Under the support from China Government, the HKSAR Government has been striving on the development of Chinese medicine. She also commented, China is gradually implementing the Construction Plan for the Chinese Medicine Highlands. The Guangdong Provincial Medical Products Administration announced earlier that the holder of any traditional PCM for external use that has been registered with the Chinese Medicine Council of Hong Kong and in use in Hong Kong for more than 5 years may apply for registration through the streamlined procedures. Such PCM, upon successful approval, may be sold in the GBA. This indicated the streamlining of the approval procedures for Hong Kong registered traditional PCM for external use to be registered and sold in the Guangdong-Hong Kong-Macao GBA. Such measures greatly facilitated Hong Kong PCM manufacturers to expand their market and created unprecedented opportunities for the industry.

As a PCM provider with strong presence based in Hong Kong, Tycoon Group is strongly positioned and established mutual trust and a stable relationship with numerous local PCM brands, dedicating to provide reputable and premium products to the consumers. Tycoon Group has distributed over 100 brands and became one of the three major providers in PCM in Hong Kong in 2018. The Group is a reputable omnichannel brand marketing and management service integrator of health and well-being related products. This Strategic Cooperation Framework Agreement was contributed under Tycoon Group's intensive promotion. The cooperation among the three parties will fully utilise the strong network of the PCM brand suppliers in Hong Kong connected by the Group as well as its advantage of the one-stop service it provides.

Besides, one of the substantial shareholders of Tycoon Group, China Resources Pharmaceutical, will continue to bring strong sales network support. With the backing of the significant support from China Resources Pharmaceutical, Tycoon has been able to facilitate the offline distribution business. Tycoon Group has set up a joint venture company in China with a wholly-owned subsidiary of China Resources Pharmaceutical last year. The joint venture has commenced operation and devoted its efforts to develop the market of the Great Bay Area. Making good use of China Resources Pharmaceutical' s of more than 100,000 downstream customers and over 850 self-owned retail pharmacies across Mainland China to distribute high quality anti-pandemic and healthcare related products selected by the Group from overseas for Chinese consumers to optimize the supply chain and retail management.

Guobiao is a subsidiary of Guangzhou Guobiao Inspection and Testing Co. Limited. It is originated from "The 12th Five-Year Plan" National Science and Technology Support Programme, with the principal business in provision of one-step service for quality standard research and registration and testing, including but not limited to safety testing, quality and stability tests, and methodological investigation and verification of traditional Chinese medicine, chemical drugs, supplement and health food. It also actively provides consultation services for entry of the pharmaceutical and health product markets in Hong Kong, Macau and the Belt and Road countries. As the "National Key Laboratory of Innovative Medicines and Energy-Efficient and Cost-Reducing Pharmaceutical Equipment – Analytical Testing and Sub-centre"^[1], Guobiao is accredited by China Inspection Body and Laboratory Mandatory Approval of China and China National Accreditation Services for Conformity Assessment (ISO 17025). Guobiao fully understands the approval principles for PCM to be registered and sold in the GBA, meeting the demands of the pharmaceutical, health and well-being related product market in the GBA and providing confidence and assurance for the testing and verification of Tycoon Group's products to enter the pharmaceutical market of the GBA.

Mr. Wong Ka Chun Michael, the Chairman and the Chief Executive Officer of Tycoon Group, said, "Tycoon Group is honored to enter into a strategic cooperation framework agreement with China Resources Pharmaceutical and Guobiao and achieve a preliminary understanding in relation to the extensive cooperation in various areas including provision of integrated services for research and development and full commercial scale production of medicines in Guangdong-Hong Kong-Macau and the GBA. As one of the three major providers in PCM in Hong Kong, Tycoon Group facilitates the cooperative relationship of the ironic triangle effectively with the backing of the strong offline distribution and sales channels in China of one of the substantial shareholders, China Resources Pharmaceutical, and Guobiao, which is recognized by the country for its testing capabilities. We believe the cooperation will fully leverage the technology, market and other resources and advantages of each of the parties in their respective fields, and positively leverage the synergy. Besides, Tycoon will further develop O2O business and the online and offline dual-channel commerce strategy, sustain the strong advantage of the Group's e-commerce business. Meanwhile, Tycoon will strive to expand the offline distribution business in the GBA. We look forward to bringing premium PCM brands of Hong Kong and Macau into the PCM Blue Ocean Market of the whole China."

About Tycoon Group Holdings Limited (Stock Code: 3390)

Tycoon Group is a reputable omnichannel brand marketing and management service integrator of health and well-being related products. The Group specializes in providing one-stop services for PCM and health supplement products, including brand agent, marketing, management, distribution and sales. The Group has established a strong online and offline sales network in Hong Kong and the PRC by cultivating the industry for many years with the mission of bringing health and vitality to consumers. The Group has provided over 100 local and foreign brands and became one of the three major providers in PCM in Hong Kong in 2018. During FY2020, the Group acted as agent and sold for 120 brands of PCM, health supplement, skin care, personal care and other healthcare products through online and offline sale channels. In addition, the Group has provided a number of anti-pandemic products in great demand such as surgical masks, thermometers, hand sanitizers and cleaning wipes in 2020. With a vision of establishing its own brands of products, the Group develops Private Label Products under its well-received brands including "Boost Guard", "Wakan", and "Kinmen". Tycoon has established sound relationships with chain retailer customers, with the top two chain retailer customers operating over 520 stores in Hong Kong as at 31 December 2020. For more details, please visit the Group's official website: https://www.tycoonhealth.com/

About China Resources Pharmaceutical Group Limited (Stock Code: 3320)

Incorporated on 10 May 2007 in Hong Kong, China Resources Pharmaceutical Group Limited is a company under China Resources Group Company. Its main business includes pharmaceutical research & development, manufacturing, wholesale, distribution, retail chains and distribution services for hospitals. China Resources Pharmaceutical mainly provides products and services to patients and the society in the fields of PCM, decocting-free Chinese medicines, chemical synthetic medicines, biological medicines, natural medicines, API intermediates, nutrition and health products, medical devices, pharmaceutical equipment, and medicine circulation. Since its listing, China Resources Pharmaceuticals has been included in a number of important capital market indexes, including: Hang Seng Composite Large-Cap Index Constituents, Hang Seng China Mainland Healthcare Index, Hang Seng Healthcare Index, FTSE Global Equity Index (Large Stocks) , FTSE All-World Index, FTSE Global All Cap Index, Morgan Stanley Capital International (MSCI) China Index Constituent, Hang Seng Stock Connect Hong Kong Index, Hang Seng SCHK Mainland China Companies Index, Hang Seng SCHK ex-AH Companies Index and Hang Seng SCHK New Economy Index.

About Hong Kong Guobiao Inspection and Testing Co., Ltd

Guobiao is a subsidiary of Guangzhou Guobiao Inspection and Testing Co. Limited which is a company incorporated and continuously operating in China. It is originated from "The 12th Five-Year Plan" National Science and Technology Support Programme, with the principal business in provision of one-step service for quality standard research and registration and testing, including but not limited to safety testing, quality and stability tests, and methodological investigation and verification of traditional Chinese medicine, chemical drugs, supplement and health food. It also actively provides consultation services for entry of the pharmaceutical and health product markets in Hong Kong, Macau and the Belt and Road countries. As the "National Key Laboratory of Innovative Medicines and Energy-Efficient and Cost-Reducing Pharmaceutical Equipment – Analytical Testing and Sub-centre", Guobiao is accredited by China Inspection Body and Laboratory Mandatory Approval of China and China National Accreditation Services for Conformity Assessment (ISO 17025).

SOURCE Tycoon Group Holdings Limited

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