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OTCBB: WKBT
OTCBB: WKBT
www.weikangbio.com
www.weikangbio.com


 WEIKANG BIO-TECHNOLGY
     GROUP CO., INC
        Investor Presentation
                2010
Safe Harbor Statement


In accordance with the 1995 Securities Litigation Reform Act of the "exemption"
meaning, this statement documents contain "forward-looking statements". This
statement related to understand and unknown risks, uncertainties and other
factors will cause the company’s statement not match by the results, in which
including sales and regional economic conditions and competitive conditions,
customer relation Changes, access to capital, the difficulty of promoting new
products, existing products market conditions, customers for the existing and
new product awareness and other factors. Relevantly, the company believed that
the results is reasonable in this forward-looking statements , but can not
guarantee that the forecast entirely correct. There is no duty that company to
update the forward-looking information contained in this statements.




                                                                                  2
Company Overview
      Weikang Bio-Technology Group is a leading developer,
      Weikang Bio-Technology Group is a leading developer,
                  manufacturer and marketer of
                   manufacturer and marketer of
         Traditional Chinese Medicine (TCM)
          Traditional Chinese Medicine (TCM)
         Western prescription and OTC pharmaceuticals
          Western prescription and OTC pharmaceuticals
         Other health and nutritional products
          Other health and nutritional products
It has two subsidiaries:
Heilongjiang WeiKang
        Chinese herbal-based health and
          nutritional supplements and therapeutics
        Brand name "Rongrun"
        Founded in 2005
        210 employees
Guizhou TianFang
        Develops, manufactures and distributes
         Chinese herbal extract products and GMP
         certified western drugs
        300 employees
        Acquired in 2008, founded in 1998                    3
Financial Snapshot

                                                                                Revenue (m)
OTCBB: WKBT                        270% y/y increase
                                                       $47.48


Price (as of 6/3/2010) - $3.25                                          38.1% y/y increase


Shares outstanding - 27.4 M             $12.85                                          $13.96
                                                                       $10.11


Market capitalization - $88.9 M          2008           2009        3 months 2009    3 months 2010



TTM revenue - $51.3 million
TTM net income* - $17.2 million   115% y/y increase     $15.64            Net Income (m)

TTM fully diluted EPS* - $0.66                                          41.5% y/y increase
                                          $7.30

Insider ownership 88%                                                    $3.85
                                                                                          $5.45




                                          2008           2009        3 months 2009    3 months 2010*




                                  * Proforma – excluding non-cash expense of $912,000
                                                                                                       4
Investment Highlights

Rapid revenue and net income growth
Expanding portfolio of high margin, original SFDA
approved products
Strong R&D capability and investment ensure a strong
pipeline - targeting launching 2-3 new products a year
GMP-certified manufacturing lines scalable up to $107
million in annual production
Acquisition strategy enhances growth opportunity
Managed by pharmaceutical industry experts
Attractive valuation


                                                         5
Attractive Industry Dynamics

China’s pharmaceutical market is currently the 5th largest in the world
   Expected to grow to the 2nd largest by 2020 and the largest by 2050
   Medical expenditure ranks the 3rd after food and education*
Government stimulus package expands New Rural Cooperative Medical
System
   Investing USD $124 billion (2009-2011) with earmarks to improve
   insurance coverage
   Building 30,000 township hospitals and 700,000 village clinics with
   estimated annual increase in supply purchase of 42% from these over
   the next 5 years
Fragmented industry, dominated by local enterprises, creates opportunity
for consolidation
   Approximately 70% of the market supply is
   provided by small, local pharmaceutical companies**

       *DOH Survey, 12/2/2004
       **Economy Watch
                                                                           6
Preventative Healthcare

Preventative medicine is the primary source of medical care for 700
million rural Chinese who cannot afford adequate healthcare*
Patients generally have to pay 50% - 60% of healthcare expense out-of-
pocket
    Out-of-pocket healthcare expenditures increased from 25% in 1990 to
    58% in 2006**
    Middle class consumers risk spending all of life savings on medical
    expenses
    Private health insurance uncommon
Preventative care will remain important as universal coverage to be
implemented in 2011 will only cover basic medical services
                                            The best doctor treats the problem before
                                             The best doctor treats the problem before
                                               the problem becomes the disease ~~
                                                the problem becomes the disease
        * factsanddetails.com, April 2010
        ** China’s Ministry of Health             Old Chinese medical proverb
                                                   Old Chinese medical proverb
Weikang’s Target Market

Consumers 60 years old and above
   Approximately 170 million Chinese over 60 years old
   Aging population regularly takes supplements to
   improve health condition
Population with regular / chronic health problems
   70% of the population estimated to have some degree of health
   problems
   Increasing health problems associated with modern industrial life
   including diseases related to stress and obesity
Consumers interested in preventative health care




                                                                       8
High Margin Portfolio

TianFang
   Product portfolio of Western medicine and TCM
   Eight products in the market
       Seven SFDA approved drugs
   Average gross margin 48.5%
   Two SFDA approved product expected to be launched Q3 and Q4

WeiKang
  Product portfolio of TCM
  Seven SFDA approved nutrient medicines on the market
  Seven SFDA approved product expected to be launched Q3 and Q4
  Three drugs in pipeline
  Average gross margin 66.1%
                                                         WeiKang,
                                                          28.13%



                                                                    Tiangfang,
                                                                     71.87%



                                                  % Sales by subsidiaries (2009)

                                                                                   9
TianFang’s Product Portfolio

                                                                     % of 2009     Gross
      Product                      Main Function
                                                                     Revenue       Margin
Ferrous Fumarate
                      Treats iron deficiency anemia                   24.24%     51.28-54.39%
Granule
Eucommia
                      Nourishes the liver and kidney
Ulmoides Oliv                                                         23.26%     46.25-49.03%
                      Strengthens muscles and bones
Granule
Tinidazole Vaginal
Effervescent Tablet   Treats bacterial infections in the female
                                                                      14.87%     39.76-43.55%
                      reproductive system

                      Nourishes the liver and kidney
Bushen Qiangshen
                      Enriches yin, strengthens yang                  7.85%        63.37%
Tablet
                      Enhances health and brain function
                      Intended to treat duodenal ulcers, gastric
Ranitidine
                      ulcer, reflux esophagitis, Zollinger-Ellison
Hydrochloride                                                         1.66%        11.24%
                      syndrome, and other symptoms with gastric
Capsules
                      acid overproduction




                                                                                                10
WeiKang’s Product Portfolio
                                                                       % of 2009   Gross
        Product                      Main Function
                                                                       Revenue     Margin
                        Promotes the restoration of the natural
Rongrun Youth
                        balance of female hormones during                3.78%     66.55%
Keeping Capsules        menopause
                        Reduces free radicals and oxidative stress
Rongrun Energy
                        Intended to reduce the risk of                   3.75%     66.55%
Keeping Capsules        cardiovascular disease
                        Reduces the onset of cardiovascular
Rongrun Vitamin Sugar   disease and fatigue for diabetics                4.11%     64.43%
Capsules                Promotes healthy aging
                        Lowers blood lipid levels in order to reduce
Rongrun Intestine       the likelihood of brain and heart vessel
                        related diseases                                 3.84%     66.55%
Cleansing Capsules
                        Strengthens immune system
                        Reduces cholesterol level in arteries
Rongrun Artery
                        Promotes healthier heart and brain               3.95%     65.74%
Cleansing Capsules      functions
Rongrun Royal Jelly     Immuno-regulatory
                                                                         4.63%     61.73%
Extract                 anti-cancer properties

Rongrun Kidney Boost
                        Strengthen and promotes a healthy kidney         4.06%     71.93%
Tonic

                                                                                            11
Strong Pipeline

                Ten drugs in various stages of approval from the SFDA
                Top R&D projects include
                         Has anti-cancer properties and is used in the treatment of radiation
       10-HDA            sickness and angiocardiopathy
                         Received SFDA approval and expected to launch in 3Q 2010
  ShuangBaoGu ( a        Provides several health benefits including the prevention and treatment of
 variety of mushroom     cardiovascular disease
grown on a salty land)   Production expected to begin by end of 2010
                         Used to treat atrial fibrillation (irregular heartbeats)
      Dofetilide
                         Approved for clinical test
                         Develop therapeutic properties of glycyrrhize acid
 Licorice Flavonoid      Treated conditions and afflictions includes allergies, hepatitis,
       Project           inflammation and swelling, including peptic ulcers hypertension, excessive
                         potassium in the body, skin conditions, viral infections, tumor formation
                         and cancer, specifically breast cancer, weight loss
     KangYuan            A herbal based medicine effective in treating depression
   Antidepressant        Has passed several stages of testing and ready for clinical trials
     Capsules            Estimated R&D expenditure $71,000


                                                                                                      12
Extensive Distribution Network

Total sales network covers almost the whole country via two modes of
distribution: exclusive distributors and wholesale drug trading firms
    WeiKang’s products are sold in five provinces and Beijing
    through six distributors
    TianFang’s products are sold nationwide through over 60
    dedicated sales agents, based in 33 cities
Integrating TianFang’s distribution channels and logistics with
WeiKang to achieve synergy and economies of scale
Plans to build a national logistic chain system for medicine distribution
by 2012




                                                                            13
Sales and Distribution

Distribution channels:
   Clinical, through doctors and hospitals mostly prescription and
   OTC drugs
   Retail pharmacies, mostly OTC drugs
   Supermarkets, food and nutrition stores, mostly TCM based
   therapeutics
    Third party sales outlets, such as rural medical centers
   Conference sales and Internet orders
WaiKang plans to expand the distribution to 3 northeast provinces
and to south and southwest provinces
Consolidate and share the channels for both WeiKang and TianFang
products
Open bidding for new dealerships
from potential distributors


                                                                     14
Sales and Marketing Strategies

Direct mail pamphlets to seniors
   Includes consultation information
Emails to younger and busy urban residents
   Provides information on company products and web based ordering
   platform
Free delivery services in northern cities during winter season
Strong brand name advertising for TianFang OTC drugs
Partnership with wholesalers
   Regular promotions
   Product information forums
   Incentive schemes
Plans for future acquisitions that can
expand sales channels

                                                                 15
Production Facilities

WeiKang has six production lines
TianFang has three production lines
Highest quality equipment with national GMP certification
Unique technology synthesizes raw materials
   Ensures quality and effectiveness of therapeutics
   Helps reduce costs and enhance gross margins
Scalable production lines
   Up to USD $107 million of potential annual production capacity
   WeiKang & Tianfang production rate at 35% & 50% of total
   capacity, respectively
             Production capabilities
       Capsule         Oral liquid
       Granules        Gel and soft paste
       Tablets         Powder
                                                                    16
R&D Capabilities

Dr. Zhengbin Xu, M.D head of R&D
    Over 40 years of clinical and research experience in TCM
    Published 56 articles in international and domestic journals
Professional affiliations with
    The China Medicine Research Institute
    Heilongjiang Chinese Medicine Co., Ltd.
    The Chinese Medical Association
R&D team composed of 16 industry experts
    Received 4 national awards
Advanced R&D done in collaboration with Northeastern Forestry
University and Tianjin University
Two drug testing facilities
    Shuangcheng, 246 Sq Meters, GMP compliant
    Guizhou TianFang, GMP certified

                                                                   17
Growth Strategy

Organic
   Committed to R&D of new products and improving existing product
   portfolio to secure and expand market share
   Diversify vertically into growing herbal and other raw materials to
   secure supply and lower cost
   Increase spending for advertising and continue building brand
Acquisition
   Target companies that broaden product portfolio and expands
   distribution network
   TianFang acquisition expanded distribution network nationwide
Expand and improve product portfolio with TCM,
WM, therapeutics and nutraceuticals



                                                                         18
Experienced Management Team
Yi Wang – CEO and Chairman, Founder
   Weikang CEO since 2002
   Physician of over 30 years with extensive clinical experience and bio-medical research
   experience
   Served as Director of Harbin Geriatric Hospital and Harbin Chinese Medical Hospital
   MBA from Beijing University
   Master in Medical Science, Harbin Medical University

Yanhua Liu – CFO
  CFO of WeiKang since July, 2005 and a China CPA
  20 years of experience of Finance and Accounting
  Bachelor in Finance, Heilongjiang Agricultural and Mechanical College

Zhengbin Xu – Chief Technology Officer
  CTO of Weikang since July 2007
  40 years of clinical and research experience on Traditional Chinese Medicine and Nutrition
  Publish 56 research papers on international and domestic journals
  Graduate of Northwest University of China.
  Vice President of China Medical Association.

Bing Wei - Chief Marketing Director
  Joined in Weikang in 2005
  Bachelor’s degree from Harbin Commerce University
                                                                                            19
Increasing Revenue


                 $47.48




        $12.85                               $13.96
                             $10.11


$0.82

2007    2008     2009     3 months 2009   3 months 2010

                                                      $m

                                                           20
Strong Gross Margin



$30                                                                                80%
                                      $25.84
                        64.3%
                                           54.4%              55.9%      59.6%
$20
          52.6%
                                                                                   40%

$10                 $8.27                                             $8.32
                                                       $5.65

      $0.43
$0                                                                                 0%
      2007          2008               2009        3 months 2009 3 months 2010

                            Gross Profit       Gross Margin                   $m



                                                                                         21
Increasing Net Income



$18                                                                            80.0%
                                    $15.64
                       56.6%
$12                                                                   39.0%    40.0%
                                            32.9%        38.1%
                    $7.30
                                                                   $5.45
$6                                                    $3.85                    0.0%


      -$0.45
$0                                                                             -40.0%
      2007          2008             2009        3 months 2009 3 months 2010
          -54.7%
-$6                                                                            -80.0%
                                                                           $m
                            Net Income       Profit Margin


                                                                                        22
Balance Sheet Highlights



USD in millions        Dec. 31 2009   Mar. 31 2010

Cash and Equivalents      $11.4          $18.1

Current Assets            11.7            19.5

Current Liabilities       10.5            10.8

Long-Term Debt             0.0            0.0

Shareholder's Equity      23.4            31.1




                                                     23
Attractive Valuation
                          Ticker     Price     Market Cap   Revenues    Net Income    Y/Y Net      Y/Y        PE
       Company
                          (Exch)    (6/8/10)     (mm)       2009 (mm)   2009 (mm)    Income %   revenue %   (TTM)



Weikang Bio-              WKBT
                                    $2.79       $76.45       $47.4        $15.6      116.67%    270.31%      4.5
Technology               (OTCBB)



Biostar                   BSPM
                                    $3.23       $83.42       $53.3        $10.5      56.95%      57.24%      9.8
Pharmaceuticals          (OTCBB)

Renhuang                  RHGP
                                    $2.00       $74.47       $43.4        $14.8      43.69%      3.67%       4.7
Pharmaceutical           (OTCBB)

American Oriental          AOB
                                    $2.72       $213.18      $296.1       $41.4      -13.39%     11.90%      5.1
Bioengineering            (NYSE)


                           CSKI
China SkyOne Medical                $11.33      $190.23      $130.1       $34.4      19.40%      41.72%      5.5
                         (NASDAQ)


Tianyin Pharmaceutical      TPI
                                    $2.67       $71.67       $42.8         $7.9      32.50%      28.18%      7.9
Company                   (AMEX)

                           CPHI
China Pharma                        $2.67       $115.58      $61.7        $20.3      13.46%      21.05%      5.6
                          (AMEX)

Simcere                    SCR
                                     $8.13      $447.27      $270.9       $17.5      -65.89%     6.24%      22.0
Pharmaceuticals           (NYSE)



Average                                                                               12.4%      24.3%       6.4


                                                                                                                    24
Investment Summary


Attractive industry dynamics supports long-term growth
Strong R&D capability ensures high margin pipelines
Competitive advantage with solid portfolio of proprietary
SFDA approved therapeutics
Expanding multi-channel distribution network to increase
market penetration
Established quality brand name
Fragmented industry creates
opportunities for acquisitions


                                                            25
Contact Information

Company:                     Investor Relations:
Ren Hu                       Elite IR
VP of Finance                John Marco
Weikang Bio-Technology Group Phone: (310) 819-2948
Phone: (201) 887 0415        Email: john.marco@elite-ir.com
Email: arenhu@gmail.com

Legal Counsel:                Auditor:
The Crone Law Group           Ahmed Mohidin, Partner
Wayne Chiang                  Goldman Parks Kurland Mohidin, LLP
101 Montgomery Street         16133 Ventura Blvd.
Suite 1950,                   Suite 880
San Francisco, CA 94104       Encino, CA 91436
Phone: (415) 955-8900         Phone: (818) 784-9000
Email: wchiang@cronelaw.com   Email: ahmed@gpkmllp.com


                                                              26

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Wiekang Biotech Investor Presentation, June 2010

  • 1. OTCBB: WKBT OTCBB: WKBT www.weikangbio.com www.weikangbio.com WEIKANG BIO-TECHNOLGY GROUP CO., INC Investor Presentation 2010
  • 2. Safe Harbor Statement In accordance with the 1995 Securities Litigation Reform Act of the "exemption" meaning, this statement documents contain "forward-looking statements". This statement related to understand and unknown risks, uncertainties and other factors will cause the company’s statement not match by the results, in which including sales and regional economic conditions and competitive conditions, customer relation Changes, access to capital, the difficulty of promoting new products, existing products market conditions, customers for the existing and new product awareness and other factors. Relevantly, the company believed that the results is reasonable in this forward-looking statements , but can not guarantee that the forecast entirely correct. There is no duty that company to update the forward-looking information contained in this statements. 2
  • 3. Company Overview Weikang Bio-Technology Group is a leading developer, Weikang Bio-Technology Group is a leading developer, manufacturer and marketer of manufacturer and marketer of Traditional Chinese Medicine (TCM) Traditional Chinese Medicine (TCM) Western prescription and OTC pharmaceuticals Western prescription and OTC pharmaceuticals Other health and nutritional products Other health and nutritional products It has two subsidiaries: Heilongjiang WeiKang Chinese herbal-based health and nutritional supplements and therapeutics Brand name "Rongrun" Founded in 2005 210 employees Guizhou TianFang Develops, manufactures and distributes Chinese herbal extract products and GMP certified western drugs 300 employees Acquired in 2008, founded in 1998 3
  • 4. Financial Snapshot Revenue (m) OTCBB: WKBT 270% y/y increase $47.48 Price (as of 6/3/2010) - $3.25 38.1% y/y increase Shares outstanding - 27.4 M $12.85 $13.96 $10.11 Market capitalization - $88.9 M 2008 2009 3 months 2009 3 months 2010 TTM revenue - $51.3 million TTM net income* - $17.2 million 115% y/y increase $15.64 Net Income (m) TTM fully diluted EPS* - $0.66 41.5% y/y increase $7.30 Insider ownership 88% $3.85 $5.45 2008 2009 3 months 2009 3 months 2010* * Proforma – excluding non-cash expense of $912,000 4
  • 5. Investment Highlights Rapid revenue and net income growth Expanding portfolio of high margin, original SFDA approved products Strong R&D capability and investment ensure a strong pipeline - targeting launching 2-3 new products a year GMP-certified manufacturing lines scalable up to $107 million in annual production Acquisition strategy enhances growth opportunity Managed by pharmaceutical industry experts Attractive valuation 5
  • 6. Attractive Industry Dynamics China’s pharmaceutical market is currently the 5th largest in the world Expected to grow to the 2nd largest by 2020 and the largest by 2050 Medical expenditure ranks the 3rd after food and education* Government stimulus package expands New Rural Cooperative Medical System Investing USD $124 billion (2009-2011) with earmarks to improve insurance coverage Building 30,000 township hospitals and 700,000 village clinics with estimated annual increase in supply purchase of 42% from these over the next 5 years Fragmented industry, dominated by local enterprises, creates opportunity for consolidation Approximately 70% of the market supply is provided by small, local pharmaceutical companies** *DOH Survey, 12/2/2004 **Economy Watch 6
  • 7. Preventative Healthcare Preventative medicine is the primary source of medical care for 700 million rural Chinese who cannot afford adequate healthcare* Patients generally have to pay 50% - 60% of healthcare expense out-of- pocket Out-of-pocket healthcare expenditures increased from 25% in 1990 to 58% in 2006** Middle class consumers risk spending all of life savings on medical expenses Private health insurance uncommon Preventative care will remain important as universal coverage to be implemented in 2011 will only cover basic medical services The best doctor treats the problem before The best doctor treats the problem before the problem becomes the disease ~~ the problem becomes the disease * factsanddetails.com, April 2010 ** China’s Ministry of Health Old Chinese medical proverb Old Chinese medical proverb
  • 8. Weikang’s Target Market Consumers 60 years old and above Approximately 170 million Chinese over 60 years old Aging population regularly takes supplements to improve health condition Population with regular / chronic health problems 70% of the population estimated to have some degree of health problems Increasing health problems associated with modern industrial life including diseases related to stress and obesity Consumers interested in preventative health care 8
  • 9. High Margin Portfolio TianFang Product portfolio of Western medicine and TCM Eight products in the market Seven SFDA approved drugs Average gross margin 48.5% Two SFDA approved product expected to be launched Q3 and Q4 WeiKang Product portfolio of TCM Seven SFDA approved nutrient medicines on the market Seven SFDA approved product expected to be launched Q3 and Q4 Three drugs in pipeline Average gross margin 66.1% WeiKang, 28.13% Tiangfang, 71.87% % Sales by subsidiaries (2009) 9
  • 10. TianFang’s Product Portfolio % of 2009 Gross Product Main Function Revenue Margin Ferrous Fumarate Treats iron deficiency anemia 24.24% 51.28-54.39% Granule Eucommia Nourishes the liver and kidney Ulmoides Oliv 23.26% 46.25-49.03% Strengthens muscles and bones Granule Tinidazole Vaginal Effervescent Tablet Treats bacterial infections in the female 14.87% 39.76-43.55% reproductive system Nourishes the liver and kidney Bushen Qiangshen Enriches yin, strengthens yang 7.85% 63.37% Tablet Enhances health and brain function Intended to treat duodenal ulcers, gastric Ranitidine ulcer, reflux esophagitis, Zollinger-Ellison Hydrochloride 1.66% 11.24% syndrome, and other symptoms with gastric Capsules acid overproduction 10
  • 11. WeiKang’s Product Portfolio % of 2009 Gross Product Main Function Revenue Margin Promotes the restoration of the natural Rongrun Youth balance of female hormones during 3.78% 66.55% Keeping Capsules menopause Reduces free radicals and oxidative stress Rongrun Energy Intended to reduce the risk of 3.75% 66.55% Keeping Capsules cardiovascular disease Reduces the onset of cardiovascular Rongrun Vitamin Sugar disease and fatigue for diabetics 4.11% 64.43% Capsules Promotes healthy aging Lowers blood lipid levels in order to reduce Rongrun Intestine the likelihood of brain and heart vessel related diseases 3.84% 66.55% Cleansing Capsules Strengthens immune system Reduces cholesterol level in arteries Rongrun Artery Promotes healthier heart and brain 3.95% 65.74% Cleansing Capsules functions Rongrun Royal Jelly Immuno-regulatory 4.63% 61.73% Extract anti-cancer properties Rongrun Kidney Boost Strengthen and promotes a healthy kidney 4.06% 71.93% Tonic 11
  • 12. Strong Pipeline Ten drugs in various stages of approval from the SFDA Top R&D projects include Has anti-cancer properties and is used in the treatment of radiation 10-HDA sickness and angiocardiopathy Received SFDA approval and expected to launch in 3Q 2010 ShuangBaoGu ( a Provides several health benefits including the prevention and treatment of variety of mushroom cardiovascular disease grown on a salty land) Production expected to begin by end of 2010 Used to treat atrial fibrillation (irregular heartbeats) Dofetilide Approved for clinical test Develop therapeutic properties of glycyrrhize acid Licorice Flavonoid Treated conditions and afflictions includes allergies, hepatitis, Project inflammation and swelling, including peptic ulcers hypertension, excessive potassium in the body, skin conditions, viral infections, tumor formation and cancer, specifically breast cancer, weight loss KangYuan A herbal based medicine effective in treating depression Antidepressant Has passed several stages of testing and ready for clinical trials Capsules Estimated R&D expenditure $71,000 12
  • 13. Extensive Distribution Network Total sales network covers almost the whole country via two modes of distribution: exclusive distributors and wholesale drug trading firms WeiKang’s products are sold in five provinces and Beijing through six distributors TianFang’s products are sold nationwide through over 60 dedicated sales agents, based in 33 cities Integrating TianFang’s distribution channels and logistics with WeiKang to achieve synergy and economies of scale Plans to build a national logistic chain system for medicine distribution by 2012 13
  • 14. Sales and Distribution Distribution channels: Clinical, through doctors and hospitals mostly prescription and OTC drugs Retail pharmacies, mostly OTC drugs Supermarkets, food and nutrition stores, mostly TCM based therapeutics Third party sales outlets, such as rural medical centers Conference sales and Internet orders WaiKang plans to expand the distribution to 3 northeast provinces and to south and southwest provinces Consolidate and share the channels for both WeiKang and TianFang products Open bidding for new dealerships from potential distributors 14
  • 15. Sales and Marketing Strategies Direct mail pamphlets to seniors Includes consultation information Emails to younger and busy urban residents Provides information on company products and web based ordering platform Free delivery services in northern cities during winter season Strong brand name advertising for TianFang OTC drugs Partnership with wholesalers Regular promotions Product information forums Incentive schemes Plans for future acquisitions that can expand sales channels 15
  • 16. Production Facilities WeiKang has six production lines TianFang has three production lines Highest quality equipment with national GMP certification Unique technology synthesizes raw materials Ensures quality and effectiveness of therapeutics Helps reduce costs and enhance gross margins Scalable production lines Up to USD $107 million of potential annual production capacity WeiKang & Tianfang production rate at 35% & 50% of total capacity, respectively Production capabilities Capsule Oral liquid Granules Gel and soft paste Tablets Powder 16
  • 17. R&D Capabilities Dr. Zhengbin Xu, M.D head of R&D Over 40 years of clinical and research experience in TCM Published 56 articles in international and domestic journals Professional affiliations with The China Medicine Research Institute Heilongjiang Chinese Medicine Co., Ltd. The Chinese Medical Association R&D team composed of 16 industry experts Received 4 national awards Advanced R&D done in collaboration with Northeastern Forestry University and Tianjin University Two drug testing facilities Shuangcheng, 246 Sq Meters, GMP compliant Guizhou TianFang, GMP certified 17
  • 18. Growth Strategy Organic Committed to R&D of new products and improving existing product portfolio to secure and expand market share Diversify vertically into growing herbal and other raw materials to secure supply and lower cost Increase spending for advertising and continue building brand Acquisition Target companies that broaden product portfolio and expands distribution network TianFang acquisition expanded distribution network nationwide Expand and improve product portfolio with TCM, WM, therapeutics and nutraceuticals 18
  • 19. Experienced Management Team Yi Wang – CEO and Chairman, Founder Weikang CEO since 2002 Physician of over 30 years with extensive clinical experience and bio-medical research experience Served as Director of Harbin Geriatric Hospital and Harbin Chinese Medical Hospital MBA from Beijing University Master in Medical Science, Harbin Medical University Yanhua Liu – CFO CFO of WeiKang since July, 2005 and a China CPA 20 years of experience of Finance and Accounting Bachelor in Finance, Heilongjiang Agricultural and Mechanical College Zhengbin Xu – Chief Technology Officer CTO of Weikang since July 2007 40 years of clinical and research experience on Traditional Chinese Medicine and Nutrition Publish 56 research papers on international and domestic journals Graduate of Northwest University of China. Vice President of China Medical Association. Bing Wei - Chief Marketing Director Joined in Weikang in 2005 Bachelor’s degree from Harbin Commerce University 19
  • 20. Increasing Revenue $47.48 $12.85 $13.96 $10.11 $0.82 2007 2008 2009 3 months 2009 3 months 2010 $m 20
  • 21. Strong Gross Margin $30 80% $25.84 64.3% 54.4% 55.9% 59.6% $20 52.6% 40% $10 $8.27 $8.32 $5.65 $0.43 $0 0% 2007 2008 2009 3 months 2009 3 months 2010 Gross Profit Gross Margin $m 21
  • 22. Increasing Net Income $18 80.0% $15.64 56.6% $12 39.0% 40.0% 32.9% 38.1% $7.30 $5.45 $6 $3.85 0.0% -$0.45 $0 -40.0% 2007 2008 2009 3 months 2009 3 months 2010 -54.7% -$6 -80.0% $m Net Income Profit Margin 22
  • 23. Balance Sheet Highlights USD in millions Dec. 31 2009 Mar. 31 2010 Cash and Equivalents $11.4 $18.1 Current Assets 11.7 19.5 Current Liabilities 10.5 10.8 Long-Term Debt 0.0 0.0 Shareholder's Equity 23.4 31.1 23
  • 24. Attractive Valuation Ticker Price Market Cap Revenues Net Income Y/Y Net Y/Y PE Company (Exch) (6/8/10) (mm) 2009 (mm) 2009 (mm) Income % revenue % (TTM) Weikang Bio- WKBT $2.79 $76.45 $47.4 $15.6 116.67% 270.31% 4.5 Technology (OTCBB) Biostar BSPM $3.23 $83.42 $53.3 $10.5 56.95% 57.24% 9.8 Pharmaceuticals (OTCBB) Renhuang RHGP $2.00 $74.47 $43.4 $14.8 43.69% 3.67% 4.7 Pharmaceutical (OTCBB) American Oriental AOB $2.72 $213.18 $296.1 $41.4 -13.39% 11.90% 5.1 Bioengineering (NYSE) CSKI China SkyOne Medical $11.33 $190.23 $130.1 $34.4 19.40% 41.72% 5.5 (NASDAQ) Tianyin Pharmaceutical TPI $2.67 $71.67 $42.8 $7.9 32.50% 28.18% 7.9 Company (AMEX) CPHI China Pharma $2.67 $115.58 $61.7 $20.3 13.46% 21.05% 5.6 (AMEX) Simcere SCR $8.13 $447.27 $270.9 $17.5 -65.89% 6.24% 22.0 Pharmaceuticals (NYSE) Average 12.4% 24.3% 6.4 24
  • 25. Investment Summary Attractive industry dynamics supports long-term growth Strong R&D capability ensures high margin pipelines Competitive advantage with solid portfolio of proprietary SFDA approved therapeutics Expanding multi-channel distribution network to increase market penetration Established quality brand name Fragmented industry creates opportunities for acquisitions 25
  • 26. Contact Information Company: Investor Relations: Ren Hu Elite IR VP of Finance John Marco Weikang Bio-Technology Group Phone: (310) 819-2948 Phone: (201) 887 0415 Email: john.marco@elite-ir.com Email: arenhu@gmail.com Legal Counsel: Auditor: The Crone Law Group Ahmed Mohidin, Partner Wayne Chiang Goldman Parks Kurland Mohidin, LLP 101 Montgomery Street 16133 Ventura Blvd. Suite 1950, Suite 880 San Francisco, CA 94104 Encino, CA 91436 Phone: (415) 955-8900 Phone: (818) 784-9000 Email: wchiang@cronelaw.com Email: ahmed@gpkmllp.com 26