Final Results

Taihua plc

("Taihua" or the "Company")

Final Results for the year ended 31 December 2014

Chairman's Statement

Despite not increasing turnover we managed to double our 2013 Profit before Tax. The main reasons for this were the increased importance of relatively high margin Forsythia and a reduction in the level of inventory provisioning.

Segmental Sales Analysis (in RMB) 

Forsythia

Despite the tonnage sold in 2014 falling to 1,146 tonnes (2013: 1,529 tonnes) the revenue generated from this product was the same as 2013. The reason was that the wholesale market reacted to the reduced harvest and the price correspondingly increased. The average selling price in 2014 was RMB 37.8/kg (2013: RMB 28.3/kg) excluding sales tax.

Recognising the issues that the forsythia plantations have in terms of the impact of adverse weather conditions we are working with various parties to introduce new cultivation practices and new strains of forsythia to mitigate the effect of poor weather in the future.

Finished Product TCMs

Sales of Finished Product TCMs fell for the third consecutive year. The distributors remain very cautious regarding taking on new products following the Chinese Government's tightening of GMP legislation and enforcement.

Bian Tong Pian sales were RMB 2.6m (2013: RMB 3.6m). Box sales were 191,600 in 2014 (2013: 243,900). The lower sales revenue was reflective of a reduction in selling price from RMB 14.8 per box in 2013 to RMB 13.3 per box in 2014. Bian Tong Pian is distributed in Beijing metropolitan district and Guangzhou military hospitals. It is also approved for sale in six further provinces. In provinces where Taihua has approval to sell but, as yet, no distribution agreements, prospective distributors continue to take small quantities to test the market.

APIs

Having temporarily ceased production of Paclitaxel some of our customers have asked us to recommence production. As such we have started production again in 2015, albeit at a lower level than in previous years.

Homoharringtonine sales continued at a similar level to the previous year. This product has historically been the most lucrative for Taihua so we are reluctant to exit the sale of this product despite significant inventory obsolescence issues. We remain of the opinion that after GMP reaccreditation we will be able to significantly recover lost Homoharringtonine sales.

Balance Sheet

Cash and cash equivalent increased to RMB 46.9m from RMB 34.5m. In addition to the improved profitability, the main reason was the reduced level of trade debtors, from RMB 58.0m to RMB 54.7m.

The Board of Directors would like to place on record their appreciation of investors' interest in Taihua. Whilst the forsythia business has not been as profitable as was hoped at the outset, the transition from dependence on APIs is largely complete.

Annual General Meeting

The Company confirms that its AGM will be held on 6 August 2015 at 11am London time at the office of Dentons UKMEA LLP, One Fleet Place, London, EC4M 7WS and that the annual report and accounts will be available from the Company's website www.taihplc.com from that date.

Nicholas Lyth

Chairman

29 June 2015

ENDS

Enquiries:

Nicholas Lyth, Taihua plc 0776 990 6686

Katy Mitchell, WH Ireland Limited +44 161 832 2174

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014

The financial statements were approved and authorised for issue by the Board of Directors on 29 June 2015.

CONSOLIDATED STATEMENT OF CHANGES in EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

Notes

1. GENERAL INFORMATION

Taihua Plc (the "Company") was incorporated and registered in England and Wales on 29 August 2006 under the Companies Act 1985 as a public company limited by shares with the name "China Natural plc" with registered number 05918155. On 8 September 2006, the Company changed its name to "Taihua plc". The address of the registered office is 4th Floor, Capital House, 85 King William Street, London, EC4N 7BL, and the principal place of business is Room 201, Unit 3, No. 16 Zhong Hua, ShiJiCheng, FuZeYuan, 239 KeJi Road, Hi-tech Zone, Xi An, 710077, People's Republic of China (the "PRC").

The Company is an investment holding company and its subsidiaries are principally engaged in the manufacturing and sales of pharmaceutical products. The consolidated financial statements are presented in Renminbi ("RMB"), the currency of the primary economic environment in which the trading company operates.

2. EARNINGS PER SHARE

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share

The Company has only one category of dilutive potential shares - share options. A calculation is done to determine the number of shares that could have been acquired at fair value based on the monetary value of the subscription rights attached to outstanding share options. It is compared with the number of shares that would have been issued assuming the exercise of the share options.