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China Nepstar Chain Drugstore Announces Share Buyback Program

Friday, August 13, 2010 Drug News J E 4
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SHENZHEN, China, Aug. 13 China NepstarChain Drugstore Ltd. (NYSE: NPD) ("Nepstar" or the "Company"), the largestdrugstore chain in China based on the number of directly operated stores,today announced that its board of directors has authorized a share repurchaseprogram. Under the terms of the approved program, China Nepstar may repurchaseup to US$20 million worth of its issued and outstanding American DepositaryShares ("ADSs") from time to time over the next 12 months. The repurchaseswill be made on the open market at prevailing market prices or in block tradesand subject to restrictions relating to volume, price and timing. The timingand extent of any purchases will depend upon market conditions, the tradingprice of the ADSs, the nature of other investment opportunities presented tothe Company, the Company's cash flows and expected cash flows, generaleconomic conditions and other factors. The Company may effect buybacktransactions pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934,as amended. The Company's board of directors will review the share repurchaseprogram periodically, and may authorize adjustment of its terms and sizeaccordingly. Nepstar plans to fund repurchases made under this program fromits available cash balance.

"We are initiating the share repurchase program to express management'sstrong confidence in the prospect of our ongoing strategic transition and thelong-term value of our company," said Mr. Jason Wu, Acting Chief ExecutiveOfficer of Nepstar. "This repurchase program reflects our commitment toincreasing shareholder value. Our strong balance sheet and cash generationcapacity present us the flexibility to invest in a variety of avenues to drivevalue."

About China Nepstar Chain Drugstore Ltd.

China Nepstar Chain Drugstore Ltd. (NYSE:NPD - News) is China's largestretail drugstore chain based on the number of directly operated stores. As ofJune 30, 2010, the Company had 2,582 stores across 74 cities, one headquarterdistribution center and 13 regional distribution centers in China. Nepstaruses directly operated stores, centralized procurement and a network ofdistribution centers to provide its customers with high-quality, professionaland convenient pharmacy services and a wide variety of other merchandise,including OTC drugs, nutritional supplements, herbal products, personal careproducts, family care products, and convenience products including consumables.Nepstar's strategy of centralized procurement, competitive pricing, customerloyalty programs and private label offerings has enabled it to capitalize onthe robust economic growth in China and to take advantage of the demographictrend in China to achieve a strong brand and leading market position. Forfurther information, please go to http://www.nepstar.cn

Safe Harbor Statement

This press release contains forward-looking statements. These statementsconstitute "forward-looking" statements within the meaning of Section 21E ofthe Securities Exchange Act of 1934, as amended, and as defined in the U.S.Private Securities Litigation Reform Act of 1995. These forward-lookingstatements can be identified by terminology such as "will," "expects,""anticipates," "future," "intends," "plans," "believes," "estimates" andsimilar statements. Among other things, the quotations from management in thispress release and the Company's strategic operational plans and businessoutlook, contain forward-looking statements. Such statements involve certainrisks and uncertainties that could cause actual results to differ materiallyfrom those in the forward-looking statements. Further information regardingthese 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-lookingstatement as a result of new information, future events or otherwise, exceptas required under applicable law.For more information, please contact: In China: Lucia Qian China Nepstar Chain Drugstore Ltd. Vice President, IR Phone: +86-755-2641-4065 Email: qianrt@nepstar.cn In the United States: Dixon Chen Grayling Investor Relations Tel: +1-646-284-9403 Email: dixon.chen@grayling.com Ivette Almeida Grayling Media Relations Tel: +1-646-284-9455 Email: ivette.almeida@grayling.com

SOURCE China Nepstar Chain Drugstore Ltd.
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