Sinopharm Tech plans to purchase 337 tons Meltblown Fabric

HONG KONG, August 14, 2020 /PRNewswire/ -- Sinopharm Tech Holdings Limited ("Sinopharm Tech" and its subsidiaries, together, the "Group", stock code: 8156) is pleased to announce that, as of 13 August, 2020, the subsidiary of the Group has entered into product sales agreements with a branch of PetroChina Company Limited (the "PetroChina Branch") and TEDA Filters Co.,Ltd.("TEDA Filters") to purchase polypropylene meltblown nonwoven fabrics (the "Meltblown Fabric"). The signed product sales agreements include the purchase of Meltblown Fabric from PetroChina Branch and TEDA Filters to the production needs of the Group and to fulfill the actual purchase order quantity. The estimated procurement schedule is 337 tons within the next five months, and subsequent procurement may increase on this basis. Based on the estimated procurement schedule of the Meltblown Fabric, more than 300 million masks can be produced by the end of 2020.

One of the suppliers of the Meltblown Fabric, the PetroChina Branch, is a branch of PetroChina Company Limited who is the leading company in China's oil and gas industry, with ownership of petroleum resources, and manufacture of its own industrial chain of polypropylene raw material. The other supplier of the Meltblown Fabric, TEDA Filters, is a state-owned enterprise and one of the earliest companies specializing in the manufacture of the Meltblown Fabric in China, owning a high market share in the Meltblown Fabric industry in China. Both Meltblown Fabric suppliers have strong background, high product quality and stable output. This cooperation will ensure that the Group has a stable source of high-quality core raw materials, and is in line with the Group's business tenet of strict adherence to quality. The suppliers are able to provide high-quality Meltblown Fabric to the Group with bacterial filtration efficiency and particle filtration efficiency at or above 99% (BFE≥99% and PFE≥99%), and the finished masks are expected to meet the higher standards of ASTM F2100.

Business of personal protective equipment from "zero" to economies of scale

Since the establishment of the Group's first production plant through joint venture in the Mainland in February 2020, the commercial blueprint of self-owned mask production lines has rapidly spread. The valuable experience of setting up a mask factory in Shandong Province has enabled the Group to quickly establish a second joint venture of medical protective products in the Mainland. At the same time, the Group set up several mask factories in Hong Kong and completed the construction of cleanrooms, production equipment commissioning and realization of large-scale production. The sharing of production and operation experiences between the Mainland and Hong Kong and the flexible allocation of raw materials and resources have enabled the Group's mask manufacturing business to progress rapidly. So far, the Group has established a total of 8 cleanrooms in the Mainland and Hong Kong, and more than 20 mask production lines have been put into operation. The Group is establishing its own mask testing laboratory in Hong Kong to conduct testing for raw materials and masks according to International Association for Testing Materials standard ("ASTM"), ensuring the Group's product quality. The personal protective equipment product categories include 3-ply adult and student masks, and N95 standard masks. The products have obtained several domestic and foreign certifications to meet the needs of the Mainland, Hong Kong and foreign countries. In addition, the Group ranks among the first batch of Hong Kong mask manufacturers to obtain the "Q-Mark" certification. Authoritative recognition will help boost consumer confidence and establish brand image.

Establishing supply and sales relationships with Hong Kong Government organizations

Two of the Group's production lines have been approved for the "Local Mask Production Subsidy Scheme" application and the Group signed a one-year procurement agreement with the Hong Kong Special Administrative Region Government for each subsidized production line, which shall assist the Hong Kong Government in epidemic prevention and control. Under these two agreements, the Group will supply up to 48 million masks to the Hong Kong Government within one year.

In addition to the Hong Kong Government, the Group has established supply and sales relationships with Hong Kong Government organizations such as the Hong Kong Hospital Authority and Social Welfare Department; the Group has also established a broad corporate and retail customer base. At the same time, the launch of our self-operated online store will broaden sales channels and shorten the distance between production and customers.

Mr. CHAN Ting, Executive Director and Chief Executive Officer of Sinopharm Tech, said, "Since the outbreak of COVID-19, the Group has actively responded and developed the personal protective equipment business to seize the opportunities of the market. This large quantity procurement of the Meltblown Fabric reflects the current situation of our Group's high output and high market demand. We have also entered the stage of increasing production capacity and positioning the high-quality medical protective equipment market. In view of this, a stable supply of raw materials will provide strong support and guarantee for the Group's high-end mask products of different quality levels and diversified models. In the future, we will continue to grasp the market growth potential, achieve profitability, and create value for shareholders."

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About Sinopharm Tech Holdings Limited

Sinopharm Tech Holdings Limited is a comprehensive business development company that provides lottery, "Internet Plus" solutions and personal protective equipment. In 2019, the Group successfully introduced Sinopharm Traditional Chinese Medicine Co. Ltd., a member of China Traditional National Chinese Medicine Co., Ltd., as one of the main strategic shareholders.

The Group has been deeply involved in China's welfare lottery and sports lottery industries for more than 20 years, and is committed to bringing different innovative solutions to the industry, from lottery systems to interactive marketing to the latest anti-counterfeiting business. Meanwhile, the Group has established 8 cleanrooms in Hong Kong SAR and Mainland China with more than 20 mask production lines, producing 3-ply adult masks, 3-ply student masks, N95 folding masks, N95 cup-shaped masks and other personal protective equipment.

SOURCE Sinopharm Tech Holdings Limited