SOURCE: First China Pharmaceutical Group, Inc.

First China Pharmaceutical Group, Inc.

May 31, 2011 09:00 ET

First China Pharma Moves Towards Acquisition of Large Regional Pharmaceutical Distributor

HONG KONG--(Marketwire - May 31, 2011) - First China Pharmaceutical Group, Inc. (OTCBB: FCPG) ("First China" or the "Company") wishes to advise that both parties have agreed to proceed with financial and legal due diligence as part the next step in the proposed acquisition of 100% of the interests of Shenzhen Ming He Tang Pharmaceutical Co., Ltd. ("Min He Tang") of Shenzhen City, Guangdong Province.

As previously announced, First China and Ming He Tang entered into a Letter of Intent ("LOI") on March 10th and the Company is very pleased that efforts to date have been positive and could result in a favorable and mutually beneficial outcome.

Ming He Tang was founded in 2002 and has established itself as a recognized and respected distributor of pharmaceutical products in the south China marketplace The company offers approximately 2500 drug varieties delivered to over 886 primary customers. Unaudited and estimated sales revenue for 2009 and 2010 are reported as RMB 90,000,000 (US$13.8 million) and RMB 110,000,000 (US$16.9 million). The acquisition of Ming He Tang into the First China Pharmaceutical group would open a significant opportunity for the company as expansion into south China is considered a huge leap forward in the Company's expansion strategy.

First China Pharmaceutical's CEO, Mr. Zhen Jiang Wang, comments, "We were confidently upbeat when we made the original announcement in March and are very pleased to provide this optimistic update. Our positive relationship with Ming He Tang is ongoing and so we felt that this announcement would reflect the confidence we enjoy as we take every step towards ensuring the rapid closure of our arrangements."

The parties will use commercially reasonable efforts to execute a definitive agreement as quickly as practicable and the Definitive Agreement shall contain customary representation and warranties, covenants and indemnification provisions.

In related news, Company management wishes to advise that plans for the acquisition of Shandong Run Kang Pharmaceutical Co. Inc. ("Run Kang") as indicated in an LOI signed November 29, 2011 have been put on temporary hold in order that the Company can focus its efforts on the acquisition of Min He Tang. The decision was undertaken as part of an assessment of First China's internal strategic business direction and regional growth plans and is in no way reflective of, or an opinion on, Run Kang's business or operations.

Details of the company's business, finances, appointments and agreements can be found as part of the Company's continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission's ("SEC") EDGAR database.

About First China Pharmaceutical Group, Inc. (OTCBB: FCPG)
First China Pharmaceutical Group, Inc. aims to develop a high growth pharmaceutical distribution company generating significant revenue from the sale of healthcare products in China. As part of its business strategy, the Company has acquired the assets of Kun Ming Xin Yuan Tang Pharmacies Co. Ltd. (XYT), which includes a strategic advantage over its competitors as it is believed to be one of a limited number of pharmaceutical distribution companies in Yunnan Province that has obtained government approval to fulfill orders over the internet. First China Pharmaceutical Group plans to continue the rapid growth of the company from its current position as a provider of approximately 5,000 drugs to more than 4,700 pharmacies, hospitals and clinics in China's Yunnan Province. For more information visit: www.firstchinapharma.com

Notice Regarding Forward-Looking Statements
This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, regulatory incentives, the development of new business opportunities, and projected costs, revenue, profits and results operations. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects and development stage companies. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

ON BEHALF OF THE BOARD
First China Pharmaceutical Group, Inc.
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Zhen Jiang Wang
Chairman and CEO

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