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Annual Results 2005March 2006

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Content

Major Accomplishments in 2005

Financial Highlights

Business Review

Future Plans and Strategies

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Major Accomplishments in 2005

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Major Accomplishments in 2005

Trademark “ ” recognised as a “Well-Known Trademark”, the ONLY medical device company with the recognition

Formed Weigao Bone for R&D, production and sale of orthopedic products. Orthopedic products launched in 4Q well received by the market

Weigao Blood formed Weigao Huading to produce dialysis products

Successfully developed world class drug eluting heart stent and obtained product registration certificate in Dec 2005

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Major Accomplishments in 2005 (Cont’d)

Weigao became the 1st company to obtain both patent for pre-filled syringes in the PRC and registration certificate in Nov 2005

Successfully developed non-PVC based materials which is classified as “2005 State Torch Plan – Hi-tech Industry Model Project” by the Ministry of Science and Technology

Needle production capacity reached 3 billion pcs per annum

Placement of 52,900,000 new H shares in Nov 2005

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Shareholders of H shares**

59.88% 32.87%

Latest Group Structure

* Weigao Holding is held by 14 holders and the largest shareholder is Mr. Chen Xue Li who holds 30% shares of Weigao Holding

** Including over 10 well-known investment funds

Senior Management

7.25%

4%96%

JieruiSubsidiary

JW Medical

50%

Weigao Jinbao

51%70%

Weigao Bone

Weigao Mould

Weigao Huading

53% 90%

51.6%

The Company

Weigao Blood

Weigao Holding*

Fuzhou Fanzhun

95%

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Financial Highlights

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Results Summary

Gross margin and net margin improved: Increased in the proportion of high value added products Enhanced operation efficiency

For the year ended 31 Dec 2005

For the year ended 31 Dec 2004

Change

RMB m RMB m

Turnover 570.0 407.8 +39.8%

Gross profit 234.3 163.0 +43.7%

- Conventional products 144.8 110.5 + 31.1%

- High value added products 89.4 52.5 + 70.3%

Gross profit margin 41.1% 40.0% + 1.1 pts

- Conventional products 33.2% 33.6% - 0.4 pts

- High value added products 67.1% 66.2% + 0.9 pts

Operating profit 121.6 81.7 + 48.8%

- Operating profit margin 21.3% 20.0% + 1.3 pts

Net profit 101.2 65.9 + 53.6%

- Net profit margin 17.8% 16.2% + 1.6 pts

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High Growth in Turnover and Net Profit

02 – 05 CAGR of Turnover: 27.0%02 – 05 CAGR of Net Profit: 32.5%

0

100

200

300

400

500

600

2002 2003 2004 2005

Turnover

Net Profit

278.2

43.5

317.9

50.5

407.8

65.9

570.0

101.2

RMB million

For the year ended 31 December

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Turnover Breakdown by Products- High Value-added Products/Conventional Products

2002 2003 2004 2005

16.5

261.7

37.8

280.1

79.3

328.5

133.3

436.7

0

100

200

300

400

500

600

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005

High value-added products

Turnover Gross Profit Margins

36.8

38.9

33.6

61.2 62.2 66.2

Conventional products

67.1

33.2

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Turnover Breakdown by Products

For the year ended 31 Dec

2005 2004

Products RMB m % to turnover RMB m % to turnover Change

Self-produced products

Infusion sets 187.7 32.9 150.4 36.9 + 24.9%

Syringes 156.8 27.5 135.4 33.2 + 15.8%

Blood bags 73.6 12.9 43.0 10.5 + 71.1%

Dental & anaesthetic products 9.9 1.7 7.7 1.9 + 28.6%

Blood sampling products 10.2 1.8 5.6 1.4 + 82.0%

PVC granules 49.6 8.7 36.7 9.0 + 35.1%

Needles 18.0 3.2 4.2 1.0 +326.4%

Other products 33.3 5.8 24.8 6.1 + 34.4%

Trading

Medical instruments 29.6 5.2 0.0 0.0 --

Other products 1.2 0.3 0.1 0.0 --

Total 570.0 100.0 407.8 100.0 +39.8%

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Turnover Breakdown by Geographical Regions

For the year ended 31 Dec

2005 2004

Regions RMB m % to turnover RMB m % to turnover Change

Northeastern China 118.8 20.9 80.3 19.7 + 47.9%

Northern China 144.2 25.3 116.1 28.5 + 24.2%

Eastern and Central China

147.1 25.8 110.9 27.2 + 32.7%

Southwestern China 30.4 5.3 20.6 5.0 + 47.6%

Northwestern China 20.3 3.6 15.5 3.8 + 30.5%

Southern China 73.6 12.9 47.3 11.6 + 55.7%

Overseas* 35.6 6.2 17.1 4.2 + 108.2%

Total 570.0 100.0 407.8 100.0 + 39.8%

* Over 30 countries including US, Germany, Romania, Australia and UK

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Cost Analysis

For the year ended 31 Dec

% to turnover

2005 2004 % change 2005 2004

RMB m RMB m

Raw materials

- PVC/PP/PE/ABS 86.3 72.5 +19.0 15.1 17.8

- Others 135.2 88.9 +52.1 23.7 21.8

Staff costs 73.4 56.3 +30.4 12.9 13.8

Depreciation 23.9 14.9 +59.8 4.2 3.7

Other operating expenses 144.4 102.5 +40.9 25.3 25.1

- Distribution cost* 63.9 44.7 +43.1 11.2 10.9

- Administration cost* 23.6 18.2 +29.7 4.1 4.5

- Others (Production cost) 56.9 39.6 +43.7 10.0 9.7

463.2 335.1 +38.2

*excluding staff costs and depreciation

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Balance Sheet

As at 31 Dec 2005

As at 31 Dec 2004 Change

RMB m RMB m

Non-current assets* 584.9 375.2 + 55.9%

Current assets** 547.3 360.8 + 51.7%

Cash and bank balances 171.6 111.7 + 53.6%

Capital and reserves 566.4 368.6 + 53.7%

Bank and other borrowing*** 337.9 253.3 + 33.4%

* The increase in non-current assets was mainly resulted from the increase of the Group’s new investment in machinery and production facilities** The increase in current assets was mainly resulted from the proceeds received for the placing of new H shares and the significant increase in the Group’s turnover in 2005*** The increase in the bank and other loans was mainly resulted from the expansion of the Company’s production and operation

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Other Financial Figures

As at 31 Dec 2005 As at 31 Dec 2004

Current ratio 1.69 1.71

Net debts to equity ratio 29.4% 38.4%

Acid ratio 1.32 1.39

ROE 17.9% 17.9%

For the year ended 31 Dec 2005

For the year ended 31 Dec 2004

Inventory turnover (days)* 102 92

Account receivable (days) 106 105

Final dividend (RMB/share) 2 cents 1.3 cents

Total Dividend for the year (RMB/share) 3 cents 2 cents

* The increase of the inventory turnover days was mainly due to the Company’s more stringent quality control procedures, its expansion in its sales network and the increase in the total number of products it carries

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Business Review

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Product Diversification to High-end Area

Major Products

Orthopedic Products

- Medulla nail- Steel plate- Bone

connecting screw

- Spine fixing products

BloodPurification

i) Products- Dialyzers- Adsorption columnii) Service- To establish blood purification centers

Consumables

- Syringes- Blood bags- Infusion sets- Needles- Dentals

Medication Package Material- Pre-filled syringes

Stents

- Drug eluting heart stent

- Catheters - Other stents (under development)

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Increasing Production Scale

For the year ended 31 Dec

Products Unit 2005 2004 % Change

Infusion sets Pieces 209,110,000 183,500,000 + 14.0

Blood transfusion consumables Sets 10,440,000 8,610,000 + 21.3

Syringes Pieces 310,690,000 281,240,000 + 10.5

Dental & anaesthetic products Sets 1,820,000 1,630,000 + 11.7

Blood sampling products Pieces 35,470,000 18,480,000 + 91.9

PVC granules Tons 9,476 7,607 + 24.6

- PVC granules for medical uses Tons 3,702 3,279 + 12.9

Needle products Pieces 951,980,000 487,170,000 + 95.4

Other products Sets 48,830,000 34,140,000 + 43.0

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Expanding Customer Base

Category Total no. in

the PRC

No. of customers

as at 31 Dec 2004

No. of new customers in

2005

No. of customers

as at 31 Dec 2005

% Change Current coverage

Hospital- Grade 3 (Top tier)- Grade 2 >=100 beds- Grade 1 >=20 beds

9345,1732,673

2,373712

1,145293

35671

183102

2,729783

1,328395

+ 15.0+ 10.0 + 16.0+ 34.8

84%26%15%

Blood centre 576 365 35 400 + 9.6 69%

Other medical units 9,614 611 112 723 + 18.3 8%

Trading company 1,273 255 1,528 + 20.0

Total 4,622 758 5,380 + 16.4

Source: <醫院大全 > and Weigao

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Expanding Sales Network

As at 31 Dec 2005

As at 31 Dec 2004

% Change

Sales office 15 12 +25

Customer service centre 20 18 +11

No. of cities with sales representatives 105 74 +42

No. of sales staff (note 1) 636 345 +84.3

Note 1: Increase in sales staff due to launching new projects and enlarging sales network

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New Product Development

Category No. of products as at 31 Dec 2005

New products

With patents 58 9

Under application for relevant patents

16 16

With registration certificates 110 31

Under application for registration certificates

17 17

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Future Plans and Strategies

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Corporate Strategies – “3 Enhancement and 1 Expansion”

3 Enhancement:-

Strive to develop high-tech products

Increase the proportion of high value-added products

Strengthen services to high-end customers

1 Expansion:-

Expansion in market share of conventional products

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Future Plans and Strategies

High-end MarketOrthopedic Products PRC market size: RMB8.8 billion Intensive marketing in 2006

Pre-filled syringes PRC market size: over 30 million pcs World market size: 3 billion to 3.5 billio

n pcs

Blood purification To establish dialysis centre in the PRC

Drug eluting stent PRC market size: approx. 100,000 pcs

per annum Expand overseas market in SE Asia

Consumable Market Pursue M&A opportunities

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Future Plans and Strategies

Pursue Strategic Alliance with International leading industry players:-

What Weigao can do:- OEM for partner Sales of partner’s product through Wei

gao’s nationwide sales network

What partner can do:- Sales of Weigao’s products overseas

Objective: Leading medical device manufacturer in Asia