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China Nepstar Chain Drugstore to Acquire 18 Stores from Dongguan Hui Ren Tang Pharmaceutical Co.
Date:3/6/2008

- Continues Consolidation of Competitors in Key Markets -

SHENZHEN, China, March 6 /Xinhua-PRNewswire-FirstCall/ -- China Nepstar Chain Drugstore Ltd. (NYSE: NPD) ("China Nepstar" or the "Company"), the largest drugstore chain in China based on the number of directly operated stores, today announced that it has entered into a definitive agreement with DongGuan Hui Ren Tang Pharmaceutical Co. Ltd. ("Dongguan HRT") to acquire all of its 18 directly operated chain drugstores in Dongguan City, Guangdong Province for cash consideration of RMB2.3 million (US$0.3 million). This acquisition will bring the total number of China Nepstar drugstores in Dongguan to over 120 by the end of March.

The 18 drugstores operated by Dongguan HRT generated total revenue of RMB12 million (US$1.65 million) in 2007. These stores are mostly located in the Da Lang, Cha Shan and Da Ling Shan districts in Dongguan. China Nepstar expects to take over the operations of the 18 stores in the first half of March. China Nepstar plans to inventory these stores with its own merchandise and will gradually re-brand the stores.

Situated between Guangzhou and Hong Kong, with a population of approximately 6.4 million at the end of 2007 and an area of 2,465 square kilometers, Dongguan is one of the most important manufacturing centers in the Pearl River Delta Region. According to the Dongguan Census Bureau, the average annual disposable income of Dongguan residents reached RMB27,025 in 2007, representing a 12% increase over 2006. The average resident's annual consumption reached RMB21,545 in 2007, representing 18% growth over 2006. According to the Food and Drug Administration of Dongguan, the total number of drugstores in Dongguan was 4,800 at the end of 2007, approximately half of which were chain outlets.

Mr. Jiannong Qian, Chief Executive Officer of China Nepstar, commented, "The Pearl River Delta Region is one of the key regions that China Nepstar will focus on to improve our market penetration in 2008. Although we already have strong presence in this affluent region in China, we believe there is a significant potential for further development. Our strategy is to continuously expand market share via organic expansion and synergistic acquisitions. We have every confidence that with our diverse and high quality product offerings, including private label products; proven ability to expand rapidly while increasing profitability; and experienced management team with proven track record; we will be able to manage newly opened or newly acquired stores effectively to maximize shareholder value."

About China Nepstar Chain Drugstore Ltd.

China Nepstar Chain Drugstore Ltd. (NYSE: NPD) is China's largest retail drugstore chain based on the number of directly operated stores. As of December 31, 2007, the Company had 2,002 stores across 62 cities, one headquarter distribution center and 11 regional distribution centers in China. China Nepstar uses directly operated stores, centralized procurement and a network of distribution centers to provide customers with high-quality, professional and convenient pharmacy services and a wide variety of other merchandise, including over-the-counter ("OTC") drugs, nutritional supplements, herbal products, personal care products, family care products, and convenience products including consumables. China Nepstar's strategy of competitive pricing, customer loyalty programs and private label offerings has enabled it to capitalize on the robust economic growth in China and to take advantage of the demographic trend in China to achieve a strong brand and leading market position. For further information, please go to http://www.nepstar.cn .

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

For more information, please contact:

In China:

Lucia Qian

China Nepstar Chain Drugstore Ltd.

Marketing and IR Director

Tel: +86-755-2641-4065

Email: qianrt@nepstar.cn

In the United States:

Dixon Chen

The Global Consulting Group

Investor Relations

Tel: +1-646-284-9403

Email: dchen@hfgcg.com

Ivette Almeida

The Global Consulting Group

Media Relations

Tel: +1-646-284-9455

Email: ialmeida@hfgcg.com


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SOURCE China Nepstar Chain Drugstore Ltd.
Copyright©2008 PR Newswire.
All rights reserved

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