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Tongjitang Chinese Medicines Acquires Guiyang Liquor Factory

Wednesday, February 3, 2010 General News J E 4
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SHENZHEN, China, Feb. 2 Tongjitang ChineseMedicines Company (the "Company" or "Tongjitang") (NYSE: TCM), a leadingspecialty pharmaceutical company focusing on the development, manufacturing,marketing and selling of modernized traditional Chinese medicine in China,today announced that it has set up a joint venture with a third party toacquire 100% of state-owned Guiyang Liquor Factory ("Guiyang Liquor") forRMB120.6 million in cash. Tongjitang owns 95% of the joint venture and willpay its share of the consideration in full by February 2010. This acquisitionis expected to be completed in the first quarter of 2010.

Guiyang Liquor manufactures and sells 3 brands of Chinese liquors:"Guiyang Da Qu," "Qian Chun Liquor" and "Gui Liquor." According to its auditedfinancial statements, Guiyang Liquor was profitable and achieved revenues ofRMB18.9 million in 2008. Guiyang Liquor was founded in 1958 and is located inGuiyang City, Guizhou Province, China.

Tongjitang intends to achieve the following strategic objectives throughthis transaction:

Mr. Xiaochun Wang, Tongjitang's Chief Executive Officer and Chairman ofthe Board of Directors, commented, "We are very pleased to announce theacquisition of Guiyang Liquor. Chinese liquor has a long history of use inconjunction with traditional Chinese medicines to improve efficacy.Furthermore, new ingredients can be added to liquors to form customizedmedicinal liquors and create unique treatments. We believe this acquisitionwill complement our orthopedic portfolio and help us step into the untappedChinese traditional medicinal liquor market. We are confident that we cantranslate Guiyang Liquor's regionally well-known brand and good reputationinto nationally improved sales."

About Tongjitang Chinese Medicines Company

Tongjitang Chinese Medicines Company, through its operating subsidiariesTongjitang Pharmaceutical, Tongjitang Distribution, Tongjitang Chain Stores,Guizhou Long-Life Pharmaceutical Company Limited, Qinghai Pulante and AnhuiJingfang, is a vertically integrated specialty pharmaceutical company focusedon the development, manufacturing, marketing and selling of modernizedtraditional Chinese medicine in China. Tongjitang's principal executiveoffices are located in Shenzhen, China.

Tongjitang's flagship product, Xianling Gubao, is the leading traditionalChinese medicine for the treatment of osteoporosis in China as measured bysales in Renminbi. In addition to Xianling Gubao, the Company manufactures andmarkets 36 other modernized traditional Chinese medicine products and 37western medicines. Please visit http://www.tongjitang.com for more information.

Safe Harbor Statements

This press release contains forward-looking statements that are madepursuant to the safe harbor provisions of the Securities Litigation Reform Actof 1995. Although the Company believes that the expectations reflected in suchforward-looking statements are based on reasonable assumptions, suchstatements are subject to risks and uncertainties that could cause actualresults to differ materially from those projected. Although the Companybelieves that the expectations expressed in these forward-looking statementsare reasonable, they cannot assure you that their expectations will turn outto be correct, and investors are cautioned that actual results may differmaterially from those described in the forward-looking statements in thispress release. The Company does not guarantee that the forward-lookingstatements will happen as described or that they will happen at all. A numberof factors could cause actual results to differ materially from thosecontained in any forward-looking statement, including the risks that thecontemplated acquisition may be cancelled or terminated before closing, theCompany may not achieve the expected benefits from this contemplatedacquisition and the Company may face challenges managing the joint ventureand/or integrating the acquired entity with its operations. Furtherinformation regarding these and other risks is and will be included in theCompany's filings with the U.S. Securities and Exchange Commission, includingthe Company's annual report on Form 20-F. All information provided in thispress release is as of the date of this press release, and the Companyundertakes no duty to update such information, except as required underapplicable law.-- Enter the Chinese traditional medicinal liquor market. Guiyang Liquor is well-known in Guizhou Province, which is a leading province for producing branded Chinese liquors. Chinese liquor can be applied orally or topically to play an important role in the treatment of bone-related diseases. Tongjitang plans to launch 2-3 Chinese traditional medicinal liquors within the next few years. -- Enhance Tongjitang's orthopedic brand. Tongjitang believes that new Chinese traditional medicinal liquor products, together with Tongjitang's Xianling Gubao, LLF's Heiguteng Capsules, Jingfang's Fengshi Gutong and Jingshu products, will further enhance brand leadership in orthopedic traditional Chinese medicine in both the prescription and OTC markets. -- Strengthen Guiyang Liquor's geographic presence. Tongjitang will augment Guiyang Liquor's existing presence and drive additional brand recognition nationwide through Tongjitang's already sizeable sales and distribution channels.

SOURCE Tongjitang Chinese Medicines Company
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