In recent years, our business has been performing consistently. Our total revenue has increased from RMB 564 million in 2004 to RMB 1.369 billion in 2007, amounting to an annual compound growth rate of 35%. Our net profit has increased from RMB 46 million in 2004 to RMB 301 million in 2007, equating to an annual compound growth rate of 87%. We believe these growth rates far exceed the overwhelming majority of our Chinese peers.

What has been driving Simcere's rapid growth and exceptional performance in recent years? The answer lies with our corporate strategy and our flexibility to capitalize on the latest market developments.

We have directed our corporate resources to the business of innovative medicines and first-to-market generic drugs in China, and this has resulted in substantial achievements. The results of this are evidenced by the 2007 sales of Endu (Recombinant Human Endostatin), our innovative anti-cancer drug, and Bicun (Edaravone Injection), our first-to-market generic drug. Both drugs achieved record sales of RMB 216 million and 426 million respectively, in 2007, exceeding our initial projections. These two drugs have become the shining stars in the fast growing anti-cancer treatment and stroke management markets within China.

As a result of this rapid growth in sales, Endu and Bicun were the two key contributors to Simcere's profit in 2007, accounting in the aggregate for approximately 50% of annual product revenue. We successfully brought in Endu and Bicun into our portfolio demonstrating our ability to take advantage into new market opportunities. Our strategy to focus on innovative and first to market drugs provides alternative and more effective treatments to patients. This approach of bringing innovative and first-to-market generic drugs to the market also avoids the pricing competition often faced by generics. We will continue our relentless focus on discovering and pursuing new opportunities to further differentiate ourselves from the other players in the industry.

By the end of December 2007, more than 10,000 clinical patients had used Endu. Interestingly, the sales growth we have seen in the past 18 months since Endu's launch has been generated by patients purchasing Endu at their own expenses. This demonstrates the satisfaction and support among the professional and patient communities for this new treatment. The widely-anticipated phase IV clinical studies of Endu is proceeding well and other related basic and applied research of Endu, including research on Endu long-acting formulations; the discovery of relevant receptors of Endostatin in the laboratory of Tsinghua University; and research on an antibody test kit to determine the concentration of Endu in human serum, have all made much progress.

Roughly two million cancer patients are diagnosed every year in China, of whom about 300,000 have non-small cell lung cancer. Endu is currently used by only 2-3% of the patients, and we see significant market potential for this drug. With the rising per capita disposable income in China, as well as possible increases in government medical subsidies in the future, sales of Endu are expected to continue on a path of sustainable growth in the foreseeable future.

Of the approximately 1.5 million new stroke patients diagnosed each year in China, approximately 130,000 patients used Bicun in 2007. We believe that, Simcere is well poised to grow its current 8-9% share of the stroke management market in China.

The acquisition of Boda Pharmaceutical Co. Ltd in October 2007 is of great significance to Simcere's prospects in this market, as it enabled us to stabilize market prices and improve the visibility of both Bicun and Yidasheng, the two leading brands of Edaravone injection in China. The integration of these two brands continues and we believe the expiry of the Edaravone injection clinical monitoring period at the end of 2007 is expected to have limited effect on the sales of these two brands.

Bicun and Yidasheng have both become well respected medicines, achieving sustained brand loyalty. They are trusted by many physicians in different spectrums of the market; yet the huge market potential in stroke management remains relatively untouched. We project the sales of both Edaravone injections will keep a continuous growth in 2008 compared to 2007.

Among our first-to-market pipeline products, Biapenem, an anti-infective medicine, obtained its approval from SFDA in May 2008. Our production facilities are fully operational and we expect the launch of Biapenem in the coming months. Two other ongoing research projects: Palonosetron, a new anti-emetic medicine for patients under going long-term chemotherapy; and Iguratimod, a new drug for the treatment of rheumatoid arthritis, have been progressing to plan, and they have both entered the technical review stage with the SFDA. We are confident that these three first-to-market generics will become new growth vehicles and key contributors to Simcere's financial performance in the years to come.

We are acutely aware of the need to reinvest in both innovative and first-to-market generic medicines since they are of vital importance to the future of Simcere. Simcere Pharmaceutical Research Institute, currently situated alongside our headquarters in Nanjing, has been expanding.

Simcere's initial public offering on April 20, 2007, was a historic event, as Simcere became the first Chinese chemical- and bio-pharmaceutical company to be listed on the New York Stock Exchange. Our successful IPO has both reinforced Simcere's financial strength and enhanced our ability to execute our growth strategy.

As we approach 2008, we are also actively evaluating several potential acquisitions that best fit with our mission to improve the lives of patients and provide more effective treatments. Looking ahead, we are fortunate to have many growth opportunities, but Simcere still faces many challenges. These include reform of the SFDA, changes in government policies and tightened drug registration requirements which potentially could cause delays in the release of new products to the market. In addition, high domestic multiples for medical enterprises in China relative to their international peers makes it more difficult for us to invest in domestic acquisitions given the costs involved.

In 2007, we restructured our corporate Board of Directors, and have introduced one new non-executive director and three independent directors, all with different professional backgrounds and rich experience in their respective fields.

We also made changes to our management team to reinforce the vigor, focus and discipline of our management. We believe the experience of our board and management, combined with the efforts of Simcere's 2,600 employees, position Simcere to seize substantial opportunities for rapid growth within the Chinese pharmaceutical market, as well as enhance the company's sustainable growth in the years ahead.

Simcere is committed in creating value for its employees and shareholders through the bettering of patients' lives across China. By upholding a policy of ongoing innovation, Simcere will ensure the continuous development and availability of more effective medical treatment options for clinical doctors and their patients. As a shareholder, you play a critical role in these efforts. I would like to express my deepest gratitude for your continued support and encouragement and look forward to updating you on our progress as we move forward.

Jinsheng Ren
Founder, Chairman, and Chief Executive Officer