Strategy Update

Taihua plc

("Taihua" or the "Company")

Strategy Update

Following the Company's Annual General Meeting on Friday, at which all Resolutions were duly approved, the Company provides the following by way of Strategy Update.

Forsythia

Further to the announcement of 25 April 2014, in which Taihua clarified the price differential between the unprocessed forsythia (which Taihua produces) and the processed forsythia, Taihua can confirm its intention to move towards producing processed forsythia in the next 3 years. However, the move to producing processed forsythia depends on a number of factors including acquiring the necessary machinery and the processing plant and process itself achieving the Good Manufacturing Practice standard from the Chinese Regulators. It is anticipated that this process would cost approximately £1m.

Further updates will be provided in due course.

2014 Harvest Conditions

Taihua confirms that that the 2014 conditions have not been optimal for the production of Forsythia as there was frost in the flowering period this Spring and it is drier than is optimal for cultivation. There are two key stages in the production of forsythia, that of the flowering period, when it is important it is damp and there is no frost and the harvest period, when it is important there is no drought. There was frost in the flowering period and the drought was of concern as well. However, at this stage, it is too early to tell whether there will be any direct impact on the harvest itself, and further update will be provided in due course.

Traditional Chinese Medicines

The board are aware that Traditional Chinese Medicine sales have been falling, however Taihua is in conversations with a number of new distributors with a view to selling more of their products.

For more information please contact:

Nicholas Lyth, Taihua plc 0776 990 6686

Katy Mitchell, WH Ireland Limited +44 161 832 2174