Trading Update

TAIHUA PLC

("Taihua" or "the Company")

TRADING UPDATE

Taihua plc, a China-based pharmaceutical company which manufactures Paclitaxel, Homoharringtonine and Traditional Chinese Medicines, would like to update its shareholders on its progress in 2010 before the release of its financial results for the 12 months ended 31 December 2010

Active Pharmaceutical Ingredients (APIs)

As disclosed in the AGM Statement of 30 June 2010 and the 2010 Interim Results the Company enjoyed a year of stable trading of Paclitaxel, Homoharringtonine and TCMs in the first half of 2010. This stable trading continued throughout the second half of the year

The Company's sales in 2010 for its APIs were as follows:

Paclitaxel 14,970g (2009 11,555g)

Homoharringtonine 7,200g (2009 5,190g)

2010 sales were at the same prices per gram as the second half of 2009

Traditional Chinese Medicines (TCMs)

Total Sales 2010 RMB 4.2m (2009 RMB 3.7m)

Balance Sheet

During the year the Company recovered the deposit it had paid in respect of new offices, generating RMB 14.6m of positive cashflow.

Working capital requirements were stable during the year so the Company's Balance Sheet remained strong at the end of the year

Outlook

We expect our non-Forsythia TCM sales to increase in 2011 due to the Bing Tong Pian distribution agreement and the recruitment of five new salesmen who will specifically target TCM distributors

The final RMB 11m payment in respect of the Forsythia lease is expected to be made in the next month. We understand that retail pricing of Forsythia has remained stable since our announcement of this agreement

In the year ahead, Paclitaxel sales to our existing Russian and South American markets and Homoharringtonine sales to our existing Chinese market are expected to remain stable both in terms of volumes and pricing.

The Company continues to seek an appropriate distributor to enable to progress European sales of Pacliataxel. The Company is also investigating international Homoharringtonine opportunities

For more information please contact: