About FUSEN PHARM Company

According to the Frost & Sullivan report, in terms of revenue, we are the leading brand of Shuanghuanglian cold medicine in 2016, and Shuanghuanglian cold medicine was the largest category in the proprietary cold medicine market in 2016, with a market share of 9.1%. According to the same source, in 2016, in terms of revenue, we are the largest manufacturer of common cold medicines and the eighth largest manufacturer of proprietary cold medicines, with market shares of 32.1% and 3.1% respectively. According to the Frost & Sullivan report, in terms of revenue, one of our main products, Shuanghuanglian Oral Liquid, was also the largest drug category in the proprietary Chinese medicine market for colds in 2016, with a market share of 5.3%. In addition to providing the core product Shuanghuanglian cold medicine, we are engaged in R&D, production and sale of various proprietary Chinese medicine and Western medicine products to treat colds and fever, cardiovascular disease and anemia. According to the Frost & Sullivan Report, most of our products also enjoy leading market share in their respective markets. Our headquarters is strategically located in Xichuan County, Henan Province. According to the Frost & Sullivan report, based on 2016 production, Xichuan County is the third largest producer of honeysuckle in China, and honeysuckle is one of the main raw materials for the production of Shuanghuanglian drugs. According to the same report in the same year, Jinchuan County accounts for about 23.2% of the country's honeysuckle production. We believe that the favorable location of the production base in Xichuan County will help us obtain a stable supply of high-quality raw materials, ensure product quality, and control procurement costs. Our advanced pharmaceutical production facilities are also located in Geumcheon County. As of September 30, 2017, we have 18 GMP-certified production lines, which can produce more than 71 kinds of proprietary Chinese medicine and Western medicine products according to the five dosage forms specified by GMP, including small-volume injections (including pre-drug treatment and extraction), oral liquids, tablets, capsules and granules (including pre-drug treatment and extraction). We believe that this strong production capacity enables us to achieve economic benefits based on meeting market demand. At the same time, our in-house production of major packaging materials also allows us to integrate procurement, production and packaging processes in strategically located production facilities to achieve synergy effects, including better control of production costs and product quality. We have established an extensive sales and distribution network across the country, covering 31 provinces, autonomous regions and municipalities in China. As of September 30, 2017, we had 257 sales representatives in our headquarters and 17 cities, who managed a sales and distribution network composed of 1,499 dealers and 144 direct sales customers (mainly pharmacy chains). We usually seek long-term partnerships with distributors and pharmacy chains that are familiar with the local market and have a good reputation. As of September 30, 2017, over 500 dealers had business relationships with us for no less than seven years, and during the track record period, they generated about half of our revenue. Our extensive sales and distribution network has also penetrated the local terminal market in Henan Province, which we strategically position based on population density, and our market in central China (including Hubei, Hunan, Jiangxi, Hebei and Shanxi provinces, as well as Beijing and Tianjin municipalities), which provided 57.4%, 55.7% and 56.6% revenue contributions in 2015, 2016, and the nine months ended September 30, 2017, respectively.