1. Bio-technology - The Readiness of Hong Kong Opening Speech by Dr. K. S. Lo Chairman, GEM Listing Committee, Hong Kong Exchanges and Clearing Ltd. 21 October 2002 Hong Kong

2. 1 Bio-tech and Pharmaceutical Companies Listed on GEM Company NameListing DateCompany NameListing Date SIIC Medical Science & Technology (Group) Ltd 2/12/1999 Vital BioTech Holdings Ltd7/2/2002 Sino Biopharmaceutical Ltd29/9/2000Northeast Tiger Pharmaceutical Co Ltd 28/2/2002 Tong Ren Tang Technologies Co Ltd 31/10/2000New Chinese Medicine Holdings Ltd 7/3/2002 China Medical Science Ltd10/4/2001Kinetana International Biotech Pharma Ltd 3/6/2002 Jilin Province Huinan Changlong Bio-pharmacy Co Ltd 24/5/2001Changchun Da Xing Pharmaceutical Co Ltd 28/6/2002 Essex Bio-Technology Ltd27/6/2001Lee's Pharmaceutical Holdings Ltd15/7/2002 Everpride Biopharmaceutical Co Ltd 20/7/2001CK Life Sciences International, (Holdings) Inc 16/7/2002 Shanghai Fudan-Zhangjiang Bio- Pharmaceutical Co Ltd 13/8/2002

3. 2 Comparison of Major Asian Second Boards (Jan 2001 - Jun 2002) HK MALAYSIA TAIWAN SINGAPORE KOREA JAPAN GEM KLSE SB ROSE SESDAQ KOSDAQ MOTHERS No. of Companies 13729139711381036 Funds Raised821 135720891,571236 Turnover 8,6625,606124,5743,710478,7615,708 Market Cap. 7,7594,77242,8982,34840,9215,743 Opened since 199919881989198719961999 GEM ranked 2nd in terms of fund raising and 3rd in terms of turnover and market capitalisation (In USD million)

4. 3 HK Investors' Appetite for Bio-tech and Pharmaceutical Stocks in GEM September 2002 Turnover of GEM bio-tech and pharmaceutical stocks:HK$782 million Total market turnover of GEM: HK$1,639 million Bio-tech and pharmaceutical stocks contributed to about 48% of total market turnover

5. 4 Basic Listing Requirements of GEM u No profit requirement u Focused line of business u 2 years of active business pursuits under substantially the same management and ownership (may be reduced to 1 year if certain additional conditions are met)

6. 5 Role of Hong Kong in Biotech Development 1.Hong Kong is way behind US, Europe, Singapore and Taiwan in biotech development. 2.Hong Kong has advantages to attract talents to congregate here : Sound system of law, attractive living standards, technology transfer base, vast hinterland market, developed capital formation centre. 3.Find niche markets: for medium and long term development Asian diseases, stem cell research, gene therapy, biotech in agriculture. 4.Most importantly: for short term opportunity. Technology transfer: act as middleman. Capital formation centre for biotech in Greater China region.

7. 6 Government Must Take the Lead 1.Formulate long term biotech development policies, e.g. build up strong science base in universities. 2.Fund more grants for biotech R&D. 3.Establish regulatory regime for drug trial center formation. 4.Invest in downstream applied technology projects in biotech. 5.Facilitate R&D partnership with larger overseas research institutions and companies. 6.Help recruit big name biotech experts. Government to act as Facilitator and Enabler only Government to help kick start the industry

8. 7 Future Development of HK Bio-technology Industry Government:formulate and execute policies regarding innovation and technology development Bio-techincrease the level of understanding Community : and awareness of bio-tech industry GEM: provide an effective venue for bio-tech companies to raise funds