China Nepstar Enters Wenzhou Market with Acquisition

Friday, October 23, 2009 General News
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- Strengthens Penetration in Affluent Eastern China Region -

SHENZHEN, China, Oct. 23 /PRNewswire-Asia-FirstCall/ -- China Nepstar Chain Drugstore Ltd. (NYSE: NPD) ("China Nepstar"

or the "Company"), the largest drugstore chain in China based on the number of directly operated stores, today announced that it has entered into a definitive agreement with Wenzhou Ren Ren Hao Chain Drugstore Ltd. ("Ren Ren Hao") to acquire the operations of all of its eight drugstores in Wenzhou City. This acquisition represents China Nepstar's first retail presence in Wenzhou, one of the most affluent markets in Zhejiang province in terms of consumption power. The transaction is expected to be completed by the end of 2009.

Located on the east coast of China, Wenzhou is situated between the Yangtze River delta and Pearl River delta and is Zhejiang province's most populous city with a total residential population of approximately 8 million. Together with the cities of Hangzhou and Ningbo, Wenzhou is one of the key contributors to the GDP of Zhejiang province, which is one of China's top three economic growth regions. As of June 30, 2009, China Nepstar had 186 stores in Hangzhou and 178 stores in Ningbo, and holds the largest market share in each of these markets.

Founded in 2006, Ren Ren Hao generated unaudited revenues of approximately RMB 17 million in 2008. The eight Ren Ren Hao drugstores have an average store size of 250 square meters and are located in the city center or in prime locations in nearby major townships.

Mr. Ian Wade, Chief Executive Officer of China Nepstar, commented, "This acquisition represents our continued penetration in affluent provinces in China. With a well-established customer base and brand awareness in the other large cities in Zhejiang province, this entry into the Wenzhou market lays the foundation for extending our market leadership in eastern China. We plan to further expand in Wenzhou through a gradual ramp-up in new store openings and selective acquisitions."

About China Nepstar Chain Drugstore Ltd.

China Nepstar Chain Drugstore Ltd. (NYSE: NPD) is China's largest retail drugstore chain based on the number of directly operated stores. As of June 30, 2009, the Company had 2,312 stores across 64 cities, one headquarter distribution center and 12 regional distribution centers in China. China Nepstar uses directly operated stores, centralized procurement and a network of distribution centers to provide its customers with high-quality, professional and convenient pharmacy services and a wide variety of other merchandise, including OTC drugs, nutritional supplements, herbal products, personal care products, family care products, and convenience products including consumables. China Nepstar's strategy of centralized procurement, competitive pricing, customer loyalty programs and private label offerings has enabled it to capitalize on the robust economic growth in China and to take advantage of the demographic trend in China to achieve a strong brand and leading market position. For further information, please go to http://www.nepstar.cn .

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and the Company's strategic operational plans and business outlook, contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these 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-looking statement as a result of new information, future events or otherwise, except as 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
     Phone: +1-646-284-9403
     Email: dixon.chen@us.grayling.com

     Ivette Almeida
     Grayling
     Media Relations
     Phone: +1-646-284-9455
     Email: ivette.almeida@us.grayling.com

SOURCE China Nepstar Chain Drugstore Ltd.



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