Trading Update re Forsythia

Taihua plc

(the "Company" or "Taihua")

Trading Update re Forsythia

Taihua, the China-based pharmaceutical company specialising in the cultivation of Traditional Chinese Medicine ("TCM") raw materials, manufacture of TCM and certain Active Pharmaceutical Ingredients, would like to update its shareholders on the harvest and sale of Forsythia in 2016.

The combined harvest of the two plantations was 524.7 tonnes (2015: 704 tonnes). The reduction was primarily due to adverse weather conditions during the growing season in 2016.

In 2016, the average selling price was RMB30.97/kg (2015: RMB38.93/kg) excluding sales tax. Due to the decrease of demand from finished drug producers as well as the fact that there were still large amount of stocks left for Forsythia harvested in 2015, the supply of Forsythia was more than the demand from the end users. As a result, the selling price of Forsythia decreased. In addition, the Company experienced continuous rain in the harvest season and the quality of its Forsythia has been adversely affected, which in turn has further reduced the Company's selling price for this product.

As a result the overall revenue derived from Forsythia in 2016 was RMB16.25m (2015: RMB 27.41m). The entire harvest has been sold.

Nick Lyth, Chairman of Taihua said "We are disappointed with the result of the 2016 harvest and the weather conditions that have had a negative impact on both the amount and quality of our product. We continue to work with local universities to try to establish a solution to enhance the hardiness of our Forsythia and continue to explore other markets for our Traditional Chinese Medicines"

Enquiries:

Nicholas Lyth, Taihua plc 0776 990 6686

Katy Mitchell, WH Ireland Limited +44 161 832 2174