Navigation Links
China Nepstar Chain Drugstore Terminates Voting Rights Agreement for Yunnan Subsidiary

SHENZHEN, China, Jan. 5 /PRNewswire-Asia-FirstCall/ -- China Nepstar Chain Drugstore Ltd. (NYSE: NPD) ("Nepstar" or "the Company"), the largest retail drugstore chain in China based on the number of directly operated stores, today announced that its Board of Directors and the Audit Committee of the Board have each approved the termination of a voting rights agreement which assigned 30% of the total voting rights of Yunnan JianZhiJia Chain Drugstore Co. Ltd. ("JZJ") to Nepstar, effective January 5, 2009.

JZJ was founded in 1999 and is 40% owned by Nepstar, 30% owned by Qunxiang Industrial Trading ("Qunxiang"), a company 100% beneficially owned by a director of JZJ, and 30% owned by Yunnan Hengyu Industrial Trading Co., Ltd. Under the voting rights agreement, which was entered into in 1999, Qunxiang assigned its voting rights to Nepstar, and as a result, Nepstar held 40% of the equity ownership and 70% of the voting rights in JZJ. With the termination of the voting rights agreement, Nepstar will hold 40% of the voting rights, as well as continue to hold 40% of the equity ownership in JZJ.

As of September 30, 2008, JZJ had 359 drugstore outlets, all of which were located in Yunnan province in southwestern China. JZJ's other shareholders have expressed an intention to pursue the listing of the portion of the equity interest they hold in JZJ on the Shenzhen Stock Exchange in three years through a holding company. The 40% of equity ownership by China Nepstar in JZJ is not expected to be diluted after the listing of the holding company. The voting rights agreement was terminated in order to facilitate these shareholders' plan for public listing. JZJ intends to continue to focus its operation on the southwest China market.

Prior to the termination of the voting rights agreement, as the majority of the voting rights of JZJ resided with Nepstar, JZJ's financial results had been consolidated into Nepstar's financial statements. As a result of the termination of the voting rights agreement, Nepstar will no longer consolidate JZJ's financials, beginning in the first quarter of 2009, and the financial results of JZJ will be accounted for under the equity method. The following pro forma financial information is presented to show the accounting impact of the termination of the voting rights agreement as if that had been taken place in the beginning of the relevant period.

        Nepstar Income Statement for the year ended December 31, 2007
                                (in RMB 000s)

                             Historical    Margin    Pro Forma   Pro Forma
                             Financials             Financials      Margin

    Revenues                  1,954,683      --      1,629,151         --
    Gross Profit                862,672    44.1%       762,155       46.8%
    Income from Operations      180,818     9.3%       165,152       10.1%
    Share of JZJ's net income        --      --          5,381         --
    Net Income                  148,165     7.6%       148,165        9.1%

   Nepstar Income Statement for the three quarters ended September 30, 2008
                                (in RMB 000s)

                             Historical    Margin    Pro Forma   Pro Forma
                             Financials             Financials      Margin

    Revenues                  1,740,865      --      1,462,877         --
    Gross Profit                839,923    48.2%       749,712       51.2%
    Income from Operations      102,950     5.9%        91,298        6.2%
    Share of JZJ's net income        --      --          4,059         --
    Net Income                  146,612     8.4%       146,612       10.0%

Dr. Simin Zhang, Chairman of Nepstar, commented, "The Board and the Audit Committee believe it is in the best interest of the Company to support the other shareholders of JZJ to pursue a public listing of the portion of the equity interest they hold in JZJ. We offer them our best wishes in preparing for a public listing. Nepstar is now focusing on higher margin core operations in more affluent markets with higher disposable income per capita. We will continue our efforts to maximize margin growth and cash generation for our shareholders in this difficult economic environment. As the leader in the retail drugstore chain market in China, Nepstar will continue to achieve organic expansion while seeking complimentary acquisitions in the key markets."

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 September 30, 2008, the Company had 2,667 stores, including the 359 stores in YunNan subsidiary, across 76 cities, one headquarters distribution center and 11 regional distribution centers in China. Nepstar uses directly operated stores, centralized procurement and a network of distribution centers to provide its customers with high-quality, professional and convenient pharmacy services and a wide variety of other merchandise, including OTC drugs, nutritional supplements, herbal products, personal care products, family care products, and convenience products including consumables. Nepstar's strategy of centralized procurement, 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 .

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 and the Company's strategic operational plans, 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 annual report on Form 20-F. 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
     Phone: +86-755-2641-4065

    In the United States:
     Dixon Chen
     Grayling Global
     Investor Relations
     Tel:   +1-646-284-9403

     Ivette Almeida
     Grayling Global
     Media Relations
     Tel:   +1-646-284-9455

SOURCE China Nepstar Chain Drugstore Ltd.
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Chinas 1-child policy could backfire on its elderly
2. Omnicom Acquires Leading Healthcare Marketing Communications Firm in China
3. Expanding Prevalent Population Will Drive Dramatic Growth for the Asthma Drug Market in China
4. Bridgetech Announces Addition of the Agency for Healthcare Research and Quality as Content Provider in its Development of a Healthcare Web Portal in China
5. China Holdings Appoints Ronald Shon Chairman of Advisory Board to Its Wholly-Owned Subsidiary China Power, Inc.
6. China Bionanometer Industries Corporation Promotes New Cosmetics Product Line in China
7. China Shenghuo Pharmaceutical Holdings, Inc. Begins Full-Scale Launch of 12Ways(R) Chinese Herbal Skin Care Product Line
8. Statement by Mike Leavitt Secretary of Health and Human Services on the United States-China Bilateral Meetings on Food and Drug Safety
9. Supplier Assessments to Help Buyers Identify Reliable China Exporters
10. Study shows lead-based paint problem isnt isolated to China
11. Bracco Announces Initiative to Save Children in China at 2007 Annual Meeting of CGI
Post Your Comments:
(Date:11/27/2015)... Raleigh, NC (PRWEB) , ... November 27, 2015 , ... ... most effective ways to treat it. Surviving Mesothelioma has just posted the findings ... Researchers at University Hospital Zurich analyzed the cases of 136 mesothelioma patients who were ...
(Date:11/27/2015)... ... November 27, 2015 , ... The print component ... Today in Atlanta, Dallas, New York, Minneapolis, South Florida, with a circulation of ... distributed nationally, through a vast social media strategy and across a network of ...
(Date:11/27/2015)... Wilmington, DE (PRWEB) , ... November 27, 2015 ... ... a member of the well-respected Microsoft Dynamics SL User Group (MSDSLUG). Recognized as ... is an independent group of Microsoft Dynamics SL software users, partners, industry experts ...
(Date:11/27/2015)... Los Angeles, CA (PRWEB) , ... November 27, 2015 , ... ... the Commission on Accreditation of Allied Health Education Programs (CAAHEP) awarded accreditation to its ... exclusive list of CAAHEP accredited colleges, as only one of twelve colleges and universities ...
(Date:11/27/2015)... ... November 27, 2015 , ... Indosoft Inc., ... the incorporation of Asterisk 11 LTS (Long Term Support) into its Q-Suite 5.10 ... brings Q-Suite 5.10 up-to-date with a version of Asterisk that will receive not ...
Breaking Medicine News(10 mins):
(Date:11/26/2015)... November 26, 2015 --> ... use SyMRI to find optimal contrast weighting of MRI ... and has signed a research agreement with SyntheticMR in order ... Using SyMRI, it is possible to generate multiple contrast images ... the patient has left, thus making it possible to both ...
(Date:11/26/2015)... DUBLIN , Nov. 26, 2015 ... the addition of the "2016 Future Horizons ... Monitoring (TDM) Market: Supplier Shares, Country Segment Forecasts, ... offering. --> ... comprehensive analysis of the Japanese therapeutic drug monitoring ...
(Date:11/26/2015)... DUBLIN , November 26, 2015 /PRNewswire/ ... the addition of the "2016 Future ... Drugs of Abuse Testing Market: Supplier Shares, ... report to their offering. --> ... of the "2016 Future Horizons and ...
Breaking Medicine Technology: