Transfer of Misoprostol Development Project

Cathay International Holdings Limited

("Cathay" or the "Company")

Transfer of Misoprostol Development Project from Longbai to Lansen

Cathay continues to create business synergies amongst its group subsidiaries

Hong Kong, 15 October 2013 - Cathay International Holdings Ltd. (LSE: CTI.L), an investment holding company and a leading investor in the growing healthcare sector in the People's Republic of China (the "PRC"), today announces that Liwah Pharmaceutical, an indirect subsidiary of Cathay under the Lansen Group, has entered into a pharmaceutical technology transfer agreement (the "Agreement") with Tianjin Longbai Biological Engineering and Technology Company Limited, ("Longbai", a majority owned indirect subsidiary of Cathay) for the transfer of the Misoprostol Development Project from Longbai to Liwah.

The transaction is in line with one of Cathay's key management objectives to create business synergies amongst its group subsidiaries.

Under the terms of the Agreement, Liwah Pharmaceutical will purchase from Longbai the know-how and related materials, technology, intellectual property, patent permit(s) and license(s) and certain supporting equipment of the Misoprostol Development Project for a total cash consideration of approximately USD2.5 million, comprising an upfront payment of approximately USD763,100 and the remaining balance to be settled in three milestone payments during the next 45 months.

The misoprostol tablets, developed for labor induction by Longbai under the Misoprostol Development Project, have successfully passed the clinical trial phase in the PRC at the end of 2011. In accordance with the terms of the Agreement, Liwah Pharmaceutical, with the assistance of Longbai, will proceed with the application in the PRC for a new drug certificate and production licence of misoprostol tablets for use in obstetrics and gynecological fields, and those products will be sold to hospitals in the PRC.

The consideration under the Agreement was determined after arm's length negotiations between Liwah Pharmaceutical and Longbai with reference to an independent professional valuation. Completion will take place upon the grantof anew drug certificate and production licence for misoprostol tablets in the PRC, which is currently anticipated to be around early 2018. Liwah Pharmaceutical will then be in a position to commence the production and sale of misoprostol tablets to hospitals in the PRC. The Agreement also includes provisions for the refund of the consideration upon the happening of certain events, resulting in failure to achieve a milestone or to obtain the new drug certificate and production licence.

Mr. Lee Jin-Yi, Chief Executive Officer of Cathay, commented:"Today's agreement is another example of how Cathay creates business synergies amongst its group subsidiaries with respect to their strength and capabilities. Longbai, being our product development arm, has takenover seven years to take the Misoprostol Development Project through successfulclinical developmentin the PRC. For Lansen, the Misoprostol Development Project fits into its business strategy to widen its product portfolio, and Lansen has the production, sales and marketing capabilities to take the Misoprostol Development Project to the next stage, preparing for commercialization and generating new sourcesof revenue."

-ENDS-

For further enquiries, please contact:

Cathay International Holdings Limited

Eric Siu (Finance Director) Tel: +852 2828 9289

Patrick Sung (Director and Controller)

Consilium Strategic Communications

Mary-Jane Elliott/ Amber Bielecka / Lindsey Neville Tel: +44 (0) 207 920 2354

About Cathay

Cathay International Holdings Limited (LSE: CTI.L) is a main market listed investment holding company and a leading investor in the growing healthcare sector in the People's Republic of China ("PRC"). Taking advantage of the strong and growing domestic demand for high quality healthcare products in China, 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 already demonstrated a strong track record of identifying high-growth potential investment opportunities in this area including: Lansen Group, China's leading specialty pharmaceutical company focused on rheumatology, Haotian Group, a company engaged in the manufacture, marketing and sale of key active ingredients for healthcare products, including dietary supplement inositol and Botai, a company engaged in the development of pharmaceutical products and bringing these to the growing Chinese market.

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 offices in Hong Kong and Shenzhen. Cathay also has a private equity investment arm focused on minority investment opportunities and a hotel investment.

For more information please visit the Company's website: www.cathay-intl.com.hk

About Liwah Pharmaceuticals

Liwah Pharmaceutical, being a wholly-owned subsidiary of Lansen, is a company incorporated in the PRC and is engaged in the business of production, sale and product development of prescription and OTC pharmaceutical products. Liwah Pharmaceutical currently has a few modern Chinese medicines being marketed and sold to certain targeted female population in the PRC for gynaecological use and it is keen to further expand into this medical field.

About Lansen

Lansen, listed on the main board of the Hong Kong Exchange, is a leading pharmaceutical company in China which focuses on the rheumatic specialty prescription western pharmaceuticals for the treatment of autoimmune rheumatic diseases. Lansen 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. The Lansen 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 Lansen 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. One of the Group's key business strategies is to capture appropriate market opportunities to widen its existing product portfolio and thereby generate new sources of revenue and to achieve economies of scale.

About Longbai

Longbai, incorporated in the PRC, is a majority owned indirect subsidiary company of Cathay. Longbai is primarily engaged in the product development of medical drugs in the PRC including the Misoprostol Development Project.

About Misoprostol

Misoprostol is a synthetic compound drug commonly used in the obstetrics and gynaecology field. It is used to induce labor, to treat missed miscarriage, and with non-steroidal anti-inflammatory drug (NSAID) to prevent gastric ulcers. Misoprostol is commonly used for labor induction as it causes uterine contractions and the ripening of the cervix.