Update on Forsythia Lease

Taihua plc

("Taihua" or the "Company")

Update on Forsythia Lease

Further to the announcements of 19th October 2012 and 18th December 2012 the Company has completed and paid the consideration due on the lease of the second forsythia plantation with Luonan County Qinyuan Forsythia Farmers Cooperative.

As a consequence of this the Company has completed a 20 year lease over 3,100 mu (206.7 hectares) of cultivated land and 12,100 mu (806.7 hectares) of uncultivated land. The total amount paid for the 20 year lease is RMB 33 million.

The completion of this lease brings the Company's total forsythia plantations to 366.7 hectares of cultivated land and 1539.7 hectares of uncultivated land.

Non Executive Chairman, Nicholas Lyth commented as follows:

"I am pleased that we have secured the second forsythia plantation. This gives us a very strong position in the supply of forsythia raw materials. 

Our research suggests that forsythia raw materials experienced a period of rapid price escalation prior to our completion of the lease over the first plantation. Since then the wholesale price has been stable.

Taihua has identified plantations for the supply of raw materials for TCMs as an area where there is significant opportunity for increasing shareholder value. These plantations are often fragmented and run by farming cooperatives which do not readily lend themselves to most effective management."

For more information please contact:

Nicholas Lyth, Taihua plc +44 (0) 776 990 6686

Katy Mitchell, WH Ireland Limited +44 161 832 2174