July 28, 2011 ,Shanghai Pharmaceuticals Holding Company Ltd (601607.SH) has announced that it will make additional investments in its wholly-owned subsidiary, Shanghai Pharmaceutical Distribution Company Ltd.; and it will establish two new wholly-owned subsidiaries to create a nationwide pharmaceutical distribution network.

The company will reportedly invest CNY1.02 billion in cash in Shanghai Pharmaceutical Distribution. Meanwhile, it will establish two new subsidiaries — Shanghai Pharmaceutical North Investment Company and Shanghai Pharmaceutical Information Technology Company — to build its nationwide pharmaceutical distribution network.

Shanghai Pharmaceuticals will invest USD80 million to set up the foreign-invested Shanghai Pharmaceutical North Investment Company via its newly acquired wholly-owned subsidiary, China Health System Ltd. In addition, Shanghai Pharmaceuticals will invest CNY500 million to set up another wholly-owned subsidiary Shanghai Pharmaceutical Information Technology Company to realize the information construction of the group.

On May 20, 2011, Shanghai Pharmaceuticals successfully listed in Hong Kong and gained over USD2 billion through its IPO. According to the prospectus of the company, about 40% of the financed capital will be used to enlarge and enhance its distribution network and integrate its existing distribution network in China.

Shanghai Pharmaceuticals Holding Company Ltd is principally engaged in the manufacture and distribution of pharmaceuticals. The company operates its businesses primarily through the research, development and manufacture of pharmaceuticals, which offers Chinese medicines, chemical drugs, biological products, biochemical drugs and other healthcare products; pharmaceuticals distribution and supply chain solutions, which provides distribution, logistics, warehousing and other pharmaceutical supply chain value-added solutions and related services, as well as pharmaceutical retailing business, which involves in operation and management of regular chain drugstores.