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August 2017

2017 Interim Results Presentation

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The information contained in this presentation is intended solely for your personal reference.

Such information is subject to change without notice, its accuracy is not guaranteed and it may

not contain all material information concerning the Company. The Company makes no

representation regarding, and assumes no responsibility or liability for, the accuracy or

completeness of, or any errors or omissions in, any information contained herein.

In addition, the information contains projections and forward-looking statements that reflect

the Company’s current views with respect to future events and financial performance. These

views are based on current assumptions which are subject to various risks and which may

change over time. No assurance can be given that future events will occur, that projections

will be achieved, or that the Company’s assumptions are correct. It is not the intention to

provide, and you may not rely on this presentation as providing, a complete or comprehensive

analysis of the Company's financial or trading position or prospects.

This presentation does not constitute an offer or invitation to purchase or subscribe for any

securities or financial instruments or to provide any investment service or investment advice,

and no part of it shall form the basis of or be relied upon in connection with any contract,

commitment or investment decision in relation thereto.

Disclaimer

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Agenda

Open Forum4

Business Review and Financial Performance

2

Results Highlights1

Outlook3

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3

Results Highlights

Financial position remained stable, with cash and cash equivalents together with pledged deposits was RMB531.8 million, and a net cash position of about RMB239.5 million as at end of June, which was RMB8.1 million higher as compared with end of 2016

Revenue for the first half of the year decreased slightly by 0.2% to RMB429.9 million, reflecting the 12.2% volume growth of collagen casing products is not sufficient to offset the decrease in overall average selling price

Profit attributable to owners of the Company (excluding RMB25.6 million return received from the contract in progress recorded in the first half of 2016) has decreased by about 47.6% to about RMB33.2 million, earnings per share was RMB1.02 cents

Net cash inflow from operating activities was RMB176.3 million, which has increased by RMB24.6 million forthe prior period

China’s largest manufacturer of edible collagen casing products with stable market share

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New products of “Meday” and “COLL-FULL” brands are both qualified for mass production and products were officially launched for sales in early 2017; Chinese actress Xu Lu was appointed in May as ambassador for “COLL-FULL” brand, preparing to further strengthen market planning and marketing

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Business Review

and Financial

Performance

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Gross Profit & Gross Margin

(RMB million)

Revenue and Gross Margin Analysis

Revenue Trend

Sales volume of collagen sausage casing products increased byabout 12.2%

Overall decrease in product price in the industry and Group’scommitment to reduce inventory level have led to ASP decline;ASP still dropped slightly in 1Q2017 when comparing with4Q2016, but started to rebound from 2Q2017 as inventorypressure eased, and ASP for 2Q2017 was similar to 4Q2016

Revenue decreased

Excluding the reversal of provision of inventory, the cost ofsales increased by about 12.1% to about RMB321.2 millionand the increase was similar to sales volume growth

Various measures to control unit costs of production

Reasons of gross margin declineReasons of revenue decline

430.7 429.9

1H2016 1H2017

Revenue

(RMB million)

-0.2% 144.2

109.8

33.5% 25.5%

1H2016 1H2017

-23.8%

(RMB million)

683.3 670.9

435.7 430.7 429.9

971.2

732.1

618.9549.9

2013 2014 2015 2016 2017

1H

1H

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Cost of Sales Analysis

113,200

66,40055,900

128,600

71,80062,100

Raw materials & consumables

Water, electricity & coal

Salary & employee benefit

Raw materials and consumables

128,600 40.2% 113,200 39.5%

Water, electricity & coal

71,800 22.4%66,400 23.2%

Salary & employee

benefit62,100 19.4% 55,900 19.5%

Others57,600 18.0%51,500 17.8%

(RMB ‘000) (RMB ‘000)

1H2017

1H2016

Cost of Sales Breakdown Cost of Sales Comparison

Cost of sales increased by 11.7% to RMB320.1 million, mainly reflecting sales volume growth of about 12.2%

Excluding the reversal of inventory provision, the cost of sales increased by about 12.1%

The Group has take various measures to control costs during the period

+8.1%+11.0%

+13.6%

1H20161H2017

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Other income and gains

Other Income and Gains

The Group entered into a settlement

agreement pursuant to which, the Group

received a refund of the contract costs

together with the accrued return of 10%

per annum

An accumulated return of about RMB25.6

million was booked last year

38,600

17,900

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1H2016 1H2017

(RMB ‘000)

-53.6%

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Selling and distribution expenses

Selling and Distribution Expenses

Selling and distribution expenses increased

by about 128.7% from approx. RMB8.8

million for the Prior Period to approx.

RMB20.1 million for the Period

Increase in marketing costs for promotion

of various new products including “Meday”

collagen chips and “COLL-FULL” collagen

piece facial masks, as well as the increase in

wages due to the expansion in sales team

Selling and distribution expenses as

percentage of revenue increased from

approx. 2.0% for the Prior Period to approx.

4.7% for the Period

8,800

20,100

0

5,000

10,000

15,000

20,000

25,000

1H2016 1H2017

(RMB ‘000)

+128.7%

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Administrative expenses

Administrative expenses

Technologies acquired through Guangdong

Victory acquisition will be amortized over 5

years and related amortization expense was

approx. RMB25.4 million for the Period;

after deducting minority interest and

deferred tax of Guangdong Victory, the

effect of the related amortization expense

on net profit was approx. RMB11.6 million

The factor above which had a relatively

material impact on the net profit for the

Period were non-cash items and the cash

flow of the Group was not affected

73,500

72,300

60,000

65,000

70,000

75,000

1H2016 1H2017

(RMB ‘000)

-1.5%

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Net Profit and Margin

Net Profit and Margin

Major reasons：

Decrease in ASP led to decline in gross

margin

Decrease in other Income and gains

Increase in selling and distribution expense

loss attributable to minority interest of

approx. 8.1 million

Excluding return received from contract in

progress of approx. RMB25.6 million for the

Prior Period, profit attributable to owners

of the Company would decrease by approx.

47.6%

89,00020.7%

33,2007.7%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1H2016 1H2017

(RMB ‘000)

-62.7%

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Working Capital Analysis

81.7

106.9 110.4 107.3

131.9

0

20

40

60

80

100

120

140

1H15 FY15 1H16 FY16 1H17

(Day )

* Calculated as the average of the opening and closing balance of the period

Trade and Bills Payable Turnover Days *

62.5 66.0 64.673.9

89.9

0

20

40

60

80

100

120

1H15 FY15 1H16 FY16 1H17

(Day)

Trade and Bills Receivables Turnover Days *

Trade payable turnover days increased by approx. 25 days, the Group tends to make full use ofsuppliers’ credit terms for working capital

Trade receivable turnover days increased by approx. 16 days; the Group closely monitors theoperating situation of China’s meat products industry and strictly controls customer credit, but thecorresponding turnover days still increased due to the difficult operating environment of theoverall food industry

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Working Capital Analysis

70.0

52.6

40.233.7 34.1

0

20

40

60

80

1H15 FY15 1H16 FY16 1H17

Inventory Turnover Days – Raw Materials *

703.2

495.7553.6

422.0 406.1

0

200

400

600

800

1H15 FY15 1H16 FY16 1H17

(Day)

Inventory Turnover Days – FG & WIP *

(Day)

Turnover days of raw materials was largely steady vs YE2016; turnover days of FG and WIP

decreased by 15.9 days, mainly as the Group followed its strategy to boost sales volume and

speed up destocking by selling products at lower margin

* Calculated as the average of the opening and closing balance of the period

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Cash & Bank Borrowings

Note: Debt-to-equity ratio was calculated by dividing total borrowings by the total equity

Operating cash inflow was approx. RMB176.3 million, increased by RMB24.6 million

from the Prior Period

Cash and cash equivalents together with the pledged deposits amounted to approx.

RMB531.8 million

Total bank borrowings amounted to approx. RMB292.3 million,

which includes:

▪ RMB250.0 million denominated in Renminbi

▪ HKD48.7 million in Hong Kong Dollars

(equivalent to RMB42.3 million)

Net cash position of RMB239.5 million,

increased by RMB8.1 million as at YE2016

Debt-to-equity ratio reduced to approx. 10.4% (As at 31 Dec 2016：11.9%)

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Results Highlights

For the six months ended 30 June

2017 2016 Change

(in million RMB, unless otherwise stated)

Revenue 429.9 430.7 -0.2%

Gross profit margin (%) 25.5 33.5 -8.0p.p.

Profit attributable to owners of the Company 33.2 89.0 -62.7%Profit attributable to owners of the Company (excluding exceptional and non-recurring items)

33.2 63.3 -47.6%

Net margin (%) 7.7 20.7 -13.0p.p.Net margin (excluding exceptional and non-recurring items) %

7.7 .614.7 -7.0p.p.

Cash inflow from operating activities 176.3 151.7 +16.2%

Capital expenditure 9.0 18.8 -52.1%

Basic earnings per share (RMB cents) 1.02 2.73 -62.6%

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Gradually Achieve Product Diversification

“Meday” collagen chips and “COLL-FULL” collagen piece facial masks

are both qualified for mass production and their products were

officially launched for sales in early 2017

Appointed Chinese actress Xu Lu in May this year, as ambassador for

the “COLL-FULL” brand, and will further strengthen

market planning and marketing accordingly so as

to capture a larger market share

The Group will launch new products, such as

solid collagen, in the second

half of 2017

“COLL-FULL”

collagen

piece

facial masks

“Meday”

solid

collagen

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Increased Equity Interests in New Businesses

the Group is increasing its equity interests in Guangdong Victory Biotech Co., Ltd. And Ferguson

(Wuhan) Biotech Company Limited during 1H2017

Our interests in Guangdong Victory has increased to 80% as at the end of the Period; the acquisition

of equity interest in Ferguson Wuhan have not been completed as at the end of the Period but was

completed in early August

Collagen Casings & Foods Medical Use

100% equity interest

Wuzhou Shenguan

100% equity interest

Sanjian

Pharmaceutical100% equity interest

Nanning Nuyou

80% equity interest

Guangdong

Victory 100% equity interest

Guangxi Luxianna

100% equity interest

Nanning Shangguan

15% equity interest

Ferguson Wuhan

Beauty & Healthcare

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Outlook

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Outlook

The 13th Five-Year Plan promulgated by the PRC Government and the relevant departments have added the collagen biotechnology industry into the list of strategic emerging industries with national support, which includes:▪ The “13th Five-Year Development Plan on the National Strategic Emerging Industry” 《「十三五」国家战略性新兴产业发展规划》

▪ The “13th Five-Year plan on National Science and Technology Innovation” 《「十三五」国家科技创新规划》

▪ The “Catalogue of Key Products and Services in Strategic Emerging Industries” 《战略性新兴产业重点产品和服务指导目录》

▪ “Pharmaceutical Industry Development Planning Guide”《医药工业发展规划指南》

Various documents, such as the “Notice Regarding the National Nutrition Programme (2017–2030) – Guo Ban Fa [2017] No. 60” (國民營養計劃（2017–2030年）的通知－國辦發[2017]60號) published by the General Office of the State Council of the PRC during the Period and the “Guiding Opinions on the Promotion of the Sound Development of the Food Industry – Fa Gai Chan Ye [2017] No. 19” (關於促進食品工業健康發展的指導意見－發改產業[2017]19號) published by the National Development and Reform Commission and the Ministry of Industry and Information Technology of the PRC, will be more conducive to the future development of the Group

Continue to use collagen technologies as the core, collagen sausage casing business as the foundation, and set collagen-based products such as foods, healthcare products , cosmetic products, medical products and medical materials as the development direction

To achieve product diversification through automation and knowledge-based measures

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Adhere to the mission of “de-stocking, adjusting structure, maintaining stable growth”, to

enhance development in setting up the Group’s management model, and sales and marketing

system so as to maintain leading position in collagen sausage casing market

Establish quality control model and introduce stringent quality responsibility system to ensure

quality objectives are achieved

Take into account the effect of climate and sales seasonality

in production management and make full use of abundant

production capacity when formulate annual,

monthly and daily production plans

Consolidate marketing and sales team, in

particular step up the establishment of marketing

team for non-casing new products for further

expansion of the sales channels of its products,

formulate sales incentive policy and customer

support in order to accomplish sales targets

Strategy and Plan

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Open Forum