CTI.L Regulatory News (CTI)

Cathay International Holdings Limited

("Cathay" or the "Company")

Cathay's subsidiary Lansen signs exclusive marketing and

distribution agreement for medical skin care products in the PRC

Hong Kong, 9 January 2012 - Cathay International Holdings Limited (LSE: CTI.L), an investment holding company and leading investor in the growing healthcare sector in the People's Republic of China ("PRC"), is pleased to announce that its subsidiary Lansen Pharmaceutical Holdings Ltd ("Lansen" or "the Group") (HKEX: 503) has signed an exclusive distribution agreement with Shanghai Jahwa United Company Limited ("Shanghai Jahwa") (SSE: 600315) for medical skin care products in the PRC.

Lansen is a leading Chinese pharmaceutical company that predominantly focuses on disease-modifying anti-rheumatic drugs ("DMARDs"). The Group, of which Cathay owns 50.56%, is vigorously expanding its portfolio of new products in order to increase its share of the fast-growing rheumatic drug market. As part of its long-term development strategy, Lansen also has the objective of broadening its portfolio to include markets for other autoimmune conditions that it believes have the potential for rapid growth. These include autoimmune conditions involved in dermatological diseases, orthopedic diseases and nephropathy.

Shanghai Jahwa is a leading company specializing in developing, manufacturing and marketing of cosmetics products in China. These include medical skin care products (sometimes known as cosmaceuticals in Europe, and quasi-drug cosmetics in Japan and the US). Both Lansen and Shanghai Jahwa are pleased to take this opportunity to develop a long-term strategic partnership in products for the treatment of clinical skin disorders and the collaboration is in line with Lansen's strategic development strategy.

Under the agreement, Lansen has been granted the exclusive agency right for the marketing and distribution of all special skin care products under the Yuzhe brand through hospital channels, including pharmacies in hospitals and franchised pharmacies throughout the PRC, and Shanghai Jahwa will be responsible for the marketing and distribution of the Yuzhe products through non-hospital channels. The exclusive right granted to Lansen will be for a term of five years and shall be renewed prior to the expiry of the agreement if the parties intend to continue the cooperation.

After six years of collaboration with professional medical organizations, Shanghai Jahwa has established the Yuzhe dermatology brand with the aim of helping consumers address daily skin care problems. The first Yuzhe products are for the repair of skin barriers and have been jointly developed with the Department of Dermatology of Ruijin Hospital of Shanghai Jiaotong University. Through the repair of skin barriers, these products improve moisture preservation and enhance skin function. The first two products on the market in the Yuzhe range are intensive skin care products that have been validated by large-sample clinical trials before market launch and are suitable for use in the clinic as adjuvant therapy in the medical care of a wide range of conditions that involve dry skin, including psoriasis, winter itch and chronic eczema.

Lansen will sell the Yuzhe range through its extensive distribution network, which currently extends to over 1,000 hospitals in 25 provinces and four municipal cities throughout the PRC. Lansen will set up a task force for the marketing and distribution of products for the treatment of skin disorders.

Mr. Xu Jun, Chief Executive Officer of Lansen, said: "Lansen has been very successful with its rheumatology products and we are now looking to build on this achievement by adding other therapeutic franchises in related autoimmune conditions. Shanghai Jahwa is a leading company in the domestic cosmetic industry and has a significant reputation with doctors and patients for quality and safety. We feel honored to enter into this agreement with Jahwa which takes Lansen into the fast growing market for clinical skin care where we intend to build a dermatology franchise. Clinical cosmetic products are becoming increasingly popular with dermatology doctors. Although the market is still in its infancy, we believe that it has tremendous potential for Lansen."

The representative of Shanghai Jahwa's management, said: "Medical skin care products are characterized by high R&D expenditure to demonstrate product efficacy and safety, so this is usually a field that only first-class companies have the ability to pursue. Although we estimate that this market will take 10 years to mature in China, we have no doubt that there is a good momentum in development. The Yuzhe brand is an important strategic project for Shanghai Jahwa as it marks the company's formal entry into the market for medical care products and also fills a gap in Shanghai Jahwa's brand distribution - in the pharmacy. This strategic partnership with Lansen will be a win-win for both of us."

-Ends-

For further enquiries, please contact:

About Cathay

Cathay International Holdings Limited (CTI.L), focused on the People's Republic of China ("PRC"), is an investment holding company and a leading investor in the growing healthcare sector in China. The Group employs more than 2,000 people across the PRC, including over 30 specialist corporate and business development staff based at the holding company's headquarters in Hong Kong and Shenzhen.

Cathay aims to identify investment opportunities with emphasis on high growth healthcare markets and build them into market sector leaders, with a clear exit strategy. Cathay has demonstrated a strong track record of identifying high-growth potential investment opportunities in this area including: Lansen Group, a leading specialty pharmaceutical company focused on rheumatology and Haotian Group, a company engaged in the manufacture, marketing and sale of key active ingredients for healthcare products, including inositol. To complement its healthcare portfolio, Cathay has an R&D business focused on bringing new products to the growing Chinese market.

Cathay also has a private equity investment arm focused on minority investment opportunities and a hotel investment.

About Lansen

Lansen is a leading pharmaceutical company in China which focuses on the rheumatic specialty prescription western pharmaceuticals for the treatment of autoimmune rheumatic diseases. Founded in 2002, the Group is engaged in the manufacture, distribution and development of rheumatic drugs, with a leading position in the disease-modifying anti-rheumatic drugs ("DMARDs") market in the PRC. In addition to 13 non-core medical products, the Group has three rheumatic specialty prescription western pharmaceuticals as its core products, of which Pafulin and Tuoshu rank the first and the fourth respectively in terms of share of the DMARD market. The Group has established an extensive distribution network, covering more than 1,000 hospitals in 25 provinces and four municipal cities. The headquarters for production and administration is located in Ningbo, Zhejiang Province, the PRC, with modern production facilities occupying an area of 64,000 square meters. Apart from the Chinese Government's GSP certification, the Group's operating facilities are GMP-certified by the State Food and Drug Administration and adhere to stringent and closely monitored quality assurance and safety control processes.

About Shanghai Jahwa

Shanghai Jahwa United Company Limited ("Shanghai Jahwa") was among the earliest cosmetic companies in China (it was founded in 1898 as Hong Kong Kwong Sang) and was listed on the Shanghai Stock Exchange in 2001. The company has produced many famous brands, including Shuangmei, Baicaoji, Liushen, Meijiajing, Gaofu, Qingfei, etc. Of these Liushen and Meijingjia were recognized as Famous Chinese Trademarks in the early 1990s.

Shanghai Jahwa is equipped with an international standard R&D centre that has attracted more than a hundred trans-disciplinary professionals. It has established strategic cooperative relationships with many prestigious research institutes at home and abroad and its research and development achievements and number of patent applications are among the highest level in the domestic market. It enjoys a leading position worldwide in skin care products derived from Chinese herbal medicine. With the largest production capacity in China, its product range includes skin care products, cosmetics, perfumes and home use products. It is the first enterprise granted the ISO9000:1994 international quality certification in the industry and is a participant in the formulation of national standards for the cosmetics industry in China.

About medical cosmetics

Medical cosmetics help to treat problematic skin conditions with medical efficacy and are relatively safe for long term use. Medical cosmetics are similar to cosmetics but differ from conventional cosmetics because of the following characteristics:

1. The formulations of medical cosmetics contain no artificial colors, flavorings, preservatives or even surface active agents and contain a higher level of active ingredients, making them more targeted and with high efficacy.

2. Ordinary cosmetics are intended to provide basic skin care while medical cosmetics are made to deal with problem skin conditions.

3. Most medical cosmetics are made of natural ingredients that are validated by strict quality control process and large-scale clinical trials to minimize allergic reactions.