PERFORMANCE HIGHLIGHTS

• The Group posted a consolidated revenue of approximately RMB196.1 million for the six months ended 30 June 2022, representing an increase of approximately 14.1%
• Gross profit increased by 9.9% to RMB86.4 million
• Net profit increased by 13.1% to approximately RMB49.9 million
• The increase in revenue was primarily driven by the surge in revenue generated from the sales of Vigour and Vitality Supplement Pill, Fever-removing and Detoxification Pill and Additional Ingredient Huoxiang Zheng Qi Pill
• Northeast, the PRC remained as the largest contributor (55.7%) to the Group’s total revenue
• The Group has currently established a distribution network for 83 distributors covering about 40 cities in the PRC

HONG KONG SAR - Media OutReach - 25 August 2022 - Modern Chinese Medicine Group Co., Ltd. (“the Company” or “Modern Chinese Medicine”, together with its subsidiaries, the “Group”, HKEX stock code: 1643) announced its Interim results for the six months ended 30 June 2022 (“the Period”). The Group has risen to the challenges brought by the COVID-19 pandemic and recorded remarkable growth. The Group posted a consolidated revenue of approximately RMB196.1 million for the six months ended 30 June 2022, representing an increase of approximately 14.1% as compared to the corresponding year in 2021. The gross profit was approximately RMB86.4 million, representing an increase of approximately 9.9% while the overall gross profit margin decreased slightly to approximately 44.0%. Profit attributable to the owners of the Company increased to approximately 49.9 million for the six months ended 30 June 2022, representing an increase of 13.1%. BUSINESS REVIEW In the first half of 2022, the PRC struggled to contain the outbreak of COVID-19 pandemic through lockdown cities. The implementation of dynamic zero-COVID policy, especially in Shanghai, in particular, has exerted a significant adverse impact on the economy at large. While the COVID-19 pandemic may have posed difficulties to the production and operation of some pharmaceutical companies, the industry, overall, is still experiencing solid growth with favourable support from various government policies for the promotion of the proprietary Chinese medicine (“PCM”) industry. The COVID-19 pandemic has also brought the outstanding contribution of the traditional Chinese medicine (“TCM”) to the limelight. The Group is principally engaged in the production of PCM, in particular over-the-counter and prescribed medicines intended for use by the middle-aged and the elderly in the PRC. As one of the leading companies, the Group currently has about 60 types of PCM products, with intended therapeutic effects for the treatment and/or alleviation of qi – deficiency and blood-stasis condition, cardio-cerebrovascular condition, digestive and gastrointestinal condition, gynaecological condition, respiratory system condition and nervous system condition, etc. Some of the Group’s major products are believed to be having the intended therapeutic effect for the treatment of the symptoms of COVID-19 and/or similar illness. Well-established distribution network Despite the complicated and difficult situation in the first half of the year, thanks to the experience gained in coping with the pandemic as well as difficulties and challenges in the past two years，the Group still managed to strategically expand its distribution network. The Group has currently established a distribution network for 83 distributors covering about 40 cities in the PRC, which are in turn served and administered by over 37 marketing staff members with relevant experience in the TCM industry. The distribution network would not only help to develop the business operations geographically from Northeast and Huanan to other areas in the PRC, but also allow the Group to penetrate in reasonably extensive width and breadth both in Northeast and Huanan, the PRC, where the Group is strategically targeting at in view of the Group’s established footprint and the large population there. For the Period, the revenue contribution from Northeast and Huanan amounted to approximately RMB109.2 million and RMB32.1 million respectively (six months ended 30 June 2021: approximately RMB92.3 million and RMB30.0 million respectively). The Group’s distribution network and distributorship model will continue to support further development of the Group’s business operations in the foreseeable future. Stable Profitability The Group posted a consolidated revenue of approximately RMB196.1 million for the Period, representing an increase of approximately RMB24.3 million or 14.1% as compared to the six months ended 30 June 2021. The increase in revenue was primarily driven by the surge in revenue generated from the sales of our major products, namely Vigour and Vitality...