StockCode:000028/200028 NoticeNo.:2017-43 ShortFormoftheStock:SinopharmAccord/AccordB ChinaNationalAccordMedicinesCorporationLtd. SummaryofSemi-AnnualReport2017 I.ImportantNotice Thesummaryisabstractfromfull-textofannualreport,formoredetailsofoperatingresults,financialconditionandfuture developmentplanoftheCompany;investorsshouldfoundinthefull-textofannualreportthatpublishedonmediaappointedby CSRC.Noobjectionstatementofdirectors,supervisorsandseniorexecutivesWholedirectorsattendedtheMeetinginpersonforReportdeliberationPromptofmodifiedauditingopinion□Applicable√NotapplicableProfitdistributionpre-planofcommonstockorcapitalizingofcommonreservespre-plandeliberatedbytheBoardinthereportingperiod□Applicable√NotapplicableTheCompanyplansnottocarryoutcashdividendandbonusdistributionandcapitalizingofcommonreservesProfitdistributionpre-planofpreferredstockdeliberatedandapprovedbytheBoardinthereportingperiod□Applicable√NotapplicableII.Basicinformationofthecompany1.CompanyprofileShortformofthestock SinopharmAccord,AccordBStockcode 000028,200028Stockexchangeforlisting ShenzhenStockExchange Person/Waytocontact SecretaryoftheBoard Rep.ofsecurityaffairsName ChenChangbing AccordPharm.Bldg.,No.15,BaGuaSiOfficeadd. Road,FutianDistrict,Shenzhen,GuangdongProvince Tel. +(86)75525875195 E-mail 0028@szaccord.com.cn; gyyz0028@sinopharm.com 2.Mainfinancialdataandindex Whetherithasretroactiveadjustmentorre-statementonpreviousaccountingdata √Yes □No Reasonsonretroactiveadjustmentorre-statement Enterprisecombinedunderthesamecontrol Sameperiodoflastyear Increase/decreasein CurrentPeriod thisreporty-o-y Beforeadjustment Afteradjustment Afteradjustment Operatingincome(RMB) 20,524,807,669.57 14,089,052,871.88 20,562,402,047.82 -0.18% Netprofitattributabletoshareholdersof thelistedcompany(RMB) 556,125,318.19 542,122,083.86 659,078,223.36 -15.62% Netprofitattributabletoshareholdersof thelistedcompanyafterdeducting 546,253,390.00 404,509,408.41 401,762,449.20 35.96% non-recurringgainsandlosses(RMB) Netcashflowarisingfromoperating activities(RMB) 228,337,431.40 492,634,062.23 829,582,933.34 -72.48% Basicearningspershare(RMB/Share) 1.299 1.495 1.558 -16.62% Dilutedearningspershare(RMB/Share) 1.299 1.495 1.558 -16.62% WeightedaverageROE 6.41% 9.53% 8.59% -2.18% Increase/decreasein Endoflastperiod thisreport-endover Endofcurrentperiod thatoflast period-end Beforeadjustment Afteradjustment Afteradjustment Totalassets(RMB) 22,199,774,990.31 21,312,754,511.97 21,316,548,247.95 4.14% Netassetsattributabletoshareholderof listedcompany(RMB) 8,864,455,086.90 8,450,150,621.93 8,452,426,863.52 4.87% Note:InOctober2016,theCompanysellthewholeoperationalassetsofPingshanPharmaceuticalR&Dbaseand 51% equity of subordinate three pharmaceutical industry subsidiaries respectively (including Zhijun Pharmaceutical,ZhijunPharmacyTradeandPingshanPharmaceutical),throughsubscribing15.56%newshares offeringunderthenameofrelatedpartyShyndecPharmaceutical.Correspondingly,thecomparativestatementof theconsolidateprofitstatementforsemi-annualof2017includingtheprofitdataforfirsthalfyearof2016under thenameofabovementionedthreecompanies. 3.Numberofshareholdersandshare-holding InShare Totalpreferenceshareholders Totalcommonstockshareholdersin withvotingrightsrecoveredat 11,793 0 reportingperiod-end endofreportingperiod(if applicable) Toptenshareholders Amountof Sharespledged/frozen Natureof Proportionof Amountof FullnameofShareholders restricted shareholder sharesheld sharesheld Stateofshare Amount sharesheld SinopharmGroupCo.,Ltd. State-owned 56.06% 239,999,991 55,057,700 Corporation HTHK/CMGFSGUFP-CMG Foreign FIRSTSTATECHINA 2.04% 8,732,491 Corporation GROWTHFD ChinaLifeInsuranceCo.,Ltd.�C Domesticnon tradition�Cgeneralinsurance state-owned 1.51% 6,454,402 products-005L-CT001Shen Corporation ChinaNationalPharmaceutical State-owned 1.24% 5,323,043 5,323,043 ForeignTradeCorporation Corporation Foreign TARGETVALUEFUND 1.27% 5,449,232 Corporation GUOTAIJUNAN Foreign SECURITIES(HONGKONG) 1.05% 4,489,371 Corporation LIMITEDChinaMerchantsBankCo.,Ltd.�CHuitianfuMedicalService Domesticnon state-owned 1.03% 4,430,009FlexibleMixedSecuritiesCorporation InvestmentFund NewChinaLifeInsuranceCo., Domesticnon Ltd.�CBonus�CIndividualbonusesstate-owned 0.98% 4,199,772 --018L-FH002Shen Corporation CentralHuijinAssets State-owned 0.89% 3,804,400 ManagementCo.,Ltd Corporation VALUEPARTNERSCLASSIC Foreign 0.71% 3,038,918 FUND Corporation SinopharmGroupCo.,Ltd.andChinaNationalPharmaceuticalForeignTrade Corporation have the same actual controller, which is China National ExplanationonassociatedrelationshipamongthePharmaceuticalGroupCorporation.Itisunknownthatthereexistsnoassociated aforesaidshareholders relationshiporbelongstotheconsistentactionistamongtheothertradable shareholdersregulatedbytheManagementMeasureofInformationDisclosure onChangeofShareholdingforListedCompanies. 4.Changesofcontrollingshareholdersoractualcontroller Changesofcontrollingshareholdersinreportingperiod □Applicable√Notapplicable Changesofcontrollingshareholdershadnochangeinreportingperiod. Changesofactualcontrollerinreportingperiod □Applicable√Notapplicable Changesofactualcontrollerinreportingperiodhadnochangeinreportingperiod. 5.Totalpreferredstock shareholdersoftheCompanyandsharesheld bytoptenshareholderswith preferredstockheld □Applicable√Notapplicable TheCompanyhadnoshareholderswithpreferredstockheldinthereporting. 6.Corporatebonds WhethertheCompanyhasacorporationbondsthatissuancepubliclyandlistedonstockexchangeandwithoutdueonthedatewhen semi-annualreportapprovedforreleasedorfailtocashinfullondue NoIII.DiscussionandanalysisbytheManagementTeam1.IntroductionofoperationinthereportingperiodDosetheCompanyneedtocomplywithdisclosurerequirementsofthespecialindustryNoInthefirsthalfof2017,influencedbythefiercecompetitioninexternalmarket,GPObiddingprocurement,andthechangesinpharmaceuticalpolicies,theoverallpharmaceuticalindustryenteredintothe“newnormal”ofslowdowningrowth.Undertheleadershipoftheboardofdirectorsofthecompany,SinopharmAccordfocusedontheannualmanagementthemeof“strategictransformationnewjourneyandinnovativedevelopmentnewleap”,promotedthestrategiclanding,clarifiedthemanagementideas,consolidatedthemanagementfoundation,enhancedthebusinessunitprofitability,andorderlyadvancedthekeyworkswithopen,comprehensive,sunshiny,andpositiveattitude.(i)TheoverallsituationofSinopharmAccordinthefirsthalfof2017SinopharmAccordachievedoperatingincomeofRMB20.525billion,adecreaseof0.18%onayear-on-yearbasis;achievednetprofitsattributabletotheparentcompanyofRMB556million,adecreaseof15.62%onayear-on-yearbasis.Theabovementioneditemdropsmainlybecausethecomparativestatementincludingtheprofitstatementdata(firsthalfyearof2016)ofthethreeindustrialenterprisesthatreplace-outinmaterialassetsreorganizationoccurredinOctober2016.Theoperatingincomeandnetprofitattributabletoparentcompanyhasay-o-ygrowthof3.79%and6.73%respectivelyifignoretheabovementionedcauses.Pharmaceuticaldistribution achieved operating incomeof RMB15.754 billion,an increase of 1.56%on ayear-on-yearbasis;achievednetprofitsattributabletotheparentcompanyofRMB306million,anincreaseof5.50%onayear-on-yearbasis.PharmaceuticalretailachievedoperatingincomeofRMB4.888billion,anincreaseof12%onayear-on-yearbasis;achievednetprofitsattributabletotheparentcompanyofRMB99million,anincreaseof30.08%onayear-on-yearbasis.(ii)TheoverallsituationofpharmaceuticalindustryIn2017,drivenbyreformandinnovation,themedicalreformcontinuedtoadvance,variouspolicieslandedsoundly,andthemarketchangesadvancedirresistibly,therefore,weneedtonotonlyenhancetheself-confidenceindevelopmentandmaintainthestrategicstrength,butalsoseekfornewthoughtsandideasandtrytopromotethetransformation. 1.Policylevel:presentthefeaturesof“grass-rootssinking”,“widerange”,“focusing ondetailedrules”,and“fastspeed”,theprofitdirectionofpharmaceuticalindustryhavechanges,while the policiesshowdiversityandcomplexitybecauseofthenationalregion. 2.Marketlevel:thewholepharmaceuticalindustryslowsdownthegrowth,themarketentersintothe“callback”: inthefirsthalfof2017,thenationalpharmaceuticalterminalsalesreachedRMB803.7billion,anincreaseof 7.8%onayear-on-yearbasis;thesalesvolumegrowthofthreeterminals,publichospitals,retailpharmacies,and publicprimarymedicalcare,isslowingdownyearbyyear. 3.Competitionlevel:theindustrymergersandacquisitionsofcompetitorsaccelerate,directlydrivetherapid growthofsalesbyscaleexpansionofstores. (iii)Mainworkthecompanycompletedinthefirsthalfof2017 1. Strategictransformation-exploretheoperationmodeofwholesaleandretailintegration The company established the organizational structure of wholesale and retail integration for strategic transformation:theheadquarterslevelsetupthepurchasingmanagementdepartmenttopromoteandestablisha purchasingmanagementsystemforwholesaleandretailintegration,atthesametime,builtvarietysharingand informationplatformforthewholelinejoint. 2. Managementtransformation-doubleheadquarterscontrolmodeisclear Setupstrategicinvestmentheadquarters,retailoperationsheadquarters,anddistributionoperationsheadquarters, clarifythepositioning,adjustthestructure,sortouttheresponsibilities,optimizethefunctions,andgivefullplay totheheadquarters.Ofwhich: Retailoperationsheadquarters:sortouttheorganizationalstructureanddepartmentresponsibilities,strengthenthe regionallinkage,andenhancetheresourcesintegrationandprofessionalmanagementcapabilitiesofheadquarters. Distributionoperationsheadquarters:undertakethestrategictransformationrequirements,matchupwiththenew structuredesign,andadjustthestructureandpersonnel. 3.Distributetwo-wheeldrive-multi-formatcollaborativeprogress (1)Giveplaytothesmartsupplychainperformance,anddeepentheintegrationofoperations (2)Strategicallypromotebusinesstransformation,andbuildnewcompetitiveadvantages 4.Intensivelycultivate retailandconsolidatemanagement-promotebusinessdevelopmentbymanagement improvement(1)Focusonmanagement,andimproveoperationalefficiencyanddevelopmentquality(2)Optimizecontrol,andgivefullplaytoallfunctionsoftheheadquarters(3)Acceleratetheexpansionofstores,andpromotetheOmni-channelmarketingmodel5.Legaloperations-adheretothebottomlinetoensurethesustainabledevelopmentofthecompany2.Mattersrelevanttofinancialreport (1)Particularsaboutthechangesinaspectofaccountingpolicy,estimatesandcalculationmethod comparedwiththeaccountingperiodoflastyear √Applicable□Notapplicable TheReviseon“AccountingStandardsforBusinessEnterpriseNo.16�CGovernmentsubsidies”CaiKuai[2017]No.15issuedby MinistryofFinanceon10May2017,andcomeintooperationsince12June2017.Thegovernmentsubsidyoftheenterpriseon1 Jan.2017willcountbyprospectiveapplication,thenewgovernmentsubsidyoccurredfrom1Jan.2017totheimplementationof abovementionedruleswilladjustbytherevisedregulations.TheCompanycarryouttheabovementionedregulationsince12June 2017andadjustedrelevantaccountingpolicyinlinewiththerevisedregulation. Accordingtotherevised“AccountingStandardsforBusinessEnterpriseNo.16�CGovernmentsubsidies”,thegovernmentsubsidy withroutineactivitiesconcernedwillreckoninotherincome.Thegovernmentsubsidywithoutroutineactivitiesconcernedwill countinnon-operatingincome.ThediscountinterestfundswillappropriatetotheGroupbytheFinance,thecorrespondingly discountwillbewrittendownbyrelevantborrowingexpensesbytheGroup.Afterre-organizingthegovernmentsubsidiesfrom1 Jan.2017totheimplementationofabovementionedrules,thegovernmentsubsidywithroutineactivitiesconcernedsince1Jan. 2017willre-classifiedto“Otherincome”and“Financialexpenses”from“non-operatingincome”.Intheperiod,“otherincome”has increased7,958,493.67Yuan,the“financialexpenses”has179,700.00Yuandeclinedand“non-operatingincome”has8,138,193.67 Yuandecreased. Inline withtheabove mentionedregulation,thecontent listedunder itemsof “Other income”,“Financial expenses”and “non-operatingincome”fromJanuarytoJuneof2017willbeadjusted,however,theadjustmenthasnoimpactontheconsolidate andnetprofitoftheCompanyandconsolidateandshareholder’equity(fromJanuarytoJune2017),andtherearenoretroactive adjustmentforthecomparativedata. (2)Particularsaboutretroactiverestatementonmajorcorrectionforaccountingerrorsinreportingperiod □Applicable√Notapplicable Thereisnoparticularaboutretroactiverestatementonmajorcorrectionforaccountingerrorsinreportingperiod (3)Particularsaboutthechangeofconsolidationrangecomparedwiththeaccountingreportoflastyear √Applicable□Notapplicable ChangesofconsolidationrangefoundmoreinannotationVIII