China Biologic Products, Inc.
Annual Report 2018

Plain-text annual report

China Biologic Products Holdings, Inc. Creating Miracles in Life 2018 Annual Report A leading fully integrated plasma-based biopharmaceutical company in China 2 Annual Report 2018 2 Annual Report 2018 Our Mission Grow as a world-class biopharmaceutical company focused on saving lives Core Values Quality / Growth / Innovation / Promise / Focus / Passion / Responsibility Annual Report 2018 3 Annual Report 2018 3 3 Table of Contents About China Biologic Chairman’s Letter Our Management Revitalized Strategic Direction Marketing Activities Financial Highlights Business Highlights Acquisition of TianXinFu Our Major Products Research & Development Corporate Social Responsibility Board of Directors Financial Report 4 6 10 12 13 14 16 18 19 22 23 24 28 Corporate Information 225 4 Annual Report 2018 4 Annual Report 2018 China Biologic Products Holdings, Inc. (formerly “China Biologic Products, Inc.”) (NASDAQ: CBPO) is a leading fully integrated plasma-based biopharmaceutical company in China driven by the mission of creating miracles in life. Annual Report 2018 5 About China Biologic We are principally engaged in the the raw material to manufacture these integrated process of research, products. Our strong sales team helps us development, manufacture and sales of promote and sell these products through human plasma-based biopharmaceutical efficient and effective channels. We are products in China. These products are one of the first plasma companies in used as critical therapies during medical China to penetrate the end-user market. emergencies and for the prevention Directly serving about 600 hospitals and treatment of life-threatening and clinics, we maintain close contact diseases and immune-deficiency related diseases. Backed by robust research with patients and hospitals to truly understand their needs. and development capabilities, we aim to capture substantially all of the value along As we focus on our core plasma the plasma products value chain and business, we have expanded our to develop our technology to enhance product pipeline to include non-plasma our production efficiency, and meet the biopharmaceutical products and bio- growing demand of our patients.. medical device products to complement our market position and expand our Headquartered in Beijing, we base of users in the growing core plasma manufacture our plasma products therapeutic business. With our goal of through one wholly-owned facility in building a world class biopharmaceutical Guizhou Province, one majority-owned and biotechnology company, we are facility in Shandong Province, and one committed to improving quality of life and minority-owned facility in Shaanxi creating value for more patients. Province. Our well-managed and strategically located plasma collection Our common stock has been listed on stations under these facilities secure NASDAQ since 2009. 6 Annual Report 2018 Chairman’s Letter While 2018 was in many ways a challenging year for China Biologic, it was also a time of positive changes, as we welcomed a new executive team and new senior talent in key operational roles, and implemented a revitalized corporate strategy focused on improving our commercialization capabilities. During the year we continued to make progress across key areas including facility construction, plasma resource expansion as well as new products and R&D. Our new Shandong facility came online in February 2018 with more than doubled manufacturing capacity, which will help ensure expanded production over the next three to five years. With regard to expanding our plasma resources, we received operating permits for our Daming plasma collection station and Feicheng branch plasma collection facility in March and July 2018, respectively, and extended our collaboration agreement with Xinjiang Deyuan in August 2018 for another three years to include the purchase of at least an additional 500 tons of plasma. In terms of our new products and R&D, we launched Human Fibrinogen into the market from the beginning of 2018 and obtained approval from CFDA to begin human clinical trials on our Human Fibrin Sealant product in June. In the fourth quarter, Guizhou Taibang obtained approval from NMPA (formerly the CFDA) for clinical trials of its new generation IVIG. We expect to be able to complete these clinical trials over the next two years. Research and development of other pipeline products is on track, and we expect to obtain manufacturing approval of Factor IX in the first half of 2019. These exciting achievements, however, came against a challenging backdrop of widescale regulatory changes across the healthcare industry in China. At the end-user side, hospitals are still enforcing the cap on drug costs as a proportion of total medical care costs and limiting prescriptions for high-cost drugs including albumin and IVIG. In some regions, IVIG is listed as an adjuvant drug, reflecting a widespread lack of awareness of IVIG’s potential applications, resulting in a greater level of decline in IVIG sales volume compared to albumin products. These healthcare reforms have hit China Biologic harder than many of our competitors, as our business model has historically been heavily reliant on direct sales, which is where the regulatory changes have had the most direct impact, leading to a loss of market share for several of our key products. Alongside these policy headwinds, a substantial increase in competition within China’s plasma product market has resulted in a more difficult market environment. There has been increased supply of and limited hospital demand growth for major products such as albumin and IVIG, resulting in increasingly competitive ex-factory prices for distributors. In 2019 there will be even tighter national and regional medical insurance budgets, increasing the likelihood that we will face new challenges. The central government is expected to implement a series of indicators for performance appraisals at the hospital level to better monitor the effectiveness of treatment and efficiency of prescriptions, which might replace the single indicator of percentage of revenue from drug sales. These new policies could possibly slow down the volume growth for our major products. The centralized procurement in 11 pilot cities which resulted in significant price cuts of generic drugs in the fourth quarter of 2018 might be extended to more cities and other pharmaceutical areas. Annual Report 2018 7 Annual Report 2018 7 We still have strong confidence in the future growth potential of China’s plasma product market. This is particularly true for IVIG and coagulation products including factor VIII, PCC, and Fibrinogen. For those products, we continue to see a significant gap in usage in China compared to Western countries – which translates into strong future opportunity for China Biologic. We will continue to make significant efforts in R&D, with the hope of adding more new plasma products to our portfolio and increasing profitability in our plasma business. Additionally, the government’s plan to create a national list of adjuvant drugs might put more pressure on the prescription of drugs included on that list. Under the pressure of these external challenges, the lack of strong terminal promotion capabilities in our previous commercial organization has resulted in sluggish growth, or in some cases, a contraction in overall sales, which began in late 2017. While our plasma collection volume and production capacity had been growing steadily, and while we were able to accelerate sales in the fourth quarter of 2018 to decrease our Guizhou subsidiary’s IVIG inventory level by over 40% from September 30, 2018 to December 31, 2018, our total inventory reached a peak of nearly US$243 million or RMB1.7 billion at the year end, with the inventory turnover in days for finished plasma products being around five months. Joseph Chow Chairman China Biologic Products Holdings, Inc. 8 Annual Report 2018 Educating the market to drive demand The strategic solution to the challenge of creating demand in hospitals is a comprehensive rejuvenation of China Biologic’s sales and marketing capabilities – with a strong focus on market education – to stimulate demand for innovative therapies. Today, China Biologic’s management team is committed to educating doctors about the therapeutic value of IVIG and new coagulation products such as PCC and Fibrinogen in order to stimulate market demand. To this end, this year we have initiated significant changes in the leadership of our sales and marketing team, bringing on industry veterans with deep experience in commercial management roles in related medical areas. We are confident that these new sales leaders will be a game changer when it comes to improving professional promotions for doctor and patient education, increasing the numbers of hospital buyers, expanding the overall market and optimizing our distribution network. Our efforts to find new personnel for the sales and marketing team have been coupled with a significant structural reorganization within the team. The Sales Force Effectiveness system we launched in 2018 has proven essential in our efforts to screen and identify new high-potential hospitals, and the new market access teams have made excellent progress in promoting our products in these new hospitals. We are also building partnerships with reliable distributors to supplement direct sales, while continuing our exploration of partnerships with retail pharmacy chains and the use of pharmacies as an alternative to hospital sales. TianXinFu distributors conference Annual Report 2018 9 newly-joined, all of whom are united in their desire to provide long-term value to shareholders and bring better healthcare to China. We thank all of our team members for the outstanding efforts they have exerted over the past year. And to you, our shareholders, I must express my deepest gratitude. Your continued commitment to our company is what makes everything we do at China Biologic possible. With your support, I am confident that we can build a new leader in China’s plasma market. Sincerely, Mr. Joseph Chow Chairman China Biologic Products Holdings Inc. Laying foundations for growth through M&A New capital expansion plan Our Board recently approved a capital expansion plan to build a replacement fractionation facility in Guizhou, which is expected to be commercially launched in 2022. The new state-of-the-art facility will double Guizhou Taibang’s manufacturing capacity, enabling us to better meet the increasing market demand for plasma therapeutics in China and to enhance our production efficiency and quality. The new executive team, represented by myself as Chairman, Dr. Bing Li as CEO and Dr. Homer He as CBO, believe that 2019 will be a crucial year for China Biologic to transform its business model as we build on our accomplishments and work to overcome the challenges of the past. China Biologic is fortunate to have a stellar team of employees and managers, both long-standing and Beyond improvements to sales and marketing, we believe strategic M&A will be a fundamental driver in our mission to transform China Biologic into a world class biopharmaceutical and biotechnology company with a leading position in key therapeutic areas. Following the close of the TianXinFu acquisition in January 2018, our newly formed M&A team has continued to seek targets that may add new biopharmaceutical and medical device products to our portfolio, as well as potentially strengthen the company’s operational capabilities in commercialization, R&D and manufacturing. This will be key to our transition from offering mainly plasma products to a more comprehensive offering of related therapeutic areas and medical devices, a model which has been effective in markets abroad. As many of you may be aware, strategic M&A was one of the key considerations behind our private placement which was announced on August 24, 2018 and completed on September 21, 2018. The successful completion of this private placement has put us in an advantageous position to approach acquisition targets we have identified, particularly in the case of offshore targets which require sufficient US dollar cash reserves. 10 Annual Report 2018 Our Management With new CEO and CBO on board in the latter half of 2018, our management team will set their efforts towards using their extensive experience to build China Biologic into a next-generation global biopharmaceutical and biotechnology company, with a leading position in key therapeutic areas. Dr. Bing Li Chief Executive Officer CEO since August 2018, Director since July 2018, and also Director from February 2011 to May 2014 Nearly 20 years of leadership with different companies, especially those in pharmaceutical business like Fosun Group and GlaxoSmithKline B.S. in Biophysics from Fudan University, Ph.D. in Cell and Molecular Biology from University of Rochester, and MBA and MEM from Northwestern University Mr. Ming Yang Chief Financial Officer CFO since August 2012 and VP-Finance & Compliance and Treasurer between March 2012 and August 2012 6 years in financial management and 11 years of audit experience in accounting firms including audit senior manager at KPMG C.P.A. in China Dr. Huaming He Chief Business Officer CBO since December 2018 More than 30 years of professional global experience in the healthcare industry, especially in Greater China Bachelor Degree of Clinical Medicine as well as an EMBA certificate from a joint program of Shanghai Jiaotong University and Rotman Business School, University of Toronto Certified Clinical Doctor in China, with four years of clinical medical experience as a surgeon in hospitals Annual Report 2018 11 Annual Report 2018 11 12 Annual Report 2018 12 Annual Report 2018 Revitalized Strategic Direction Management has recognized three major short-to-medium term strategic goals for China Biologic: increasing sales, strategic M&A and improving corporate governance. Annual Report 2018 13 Sales and Marketing: Revitalizing our sales and marketing team with new management and strategy; Restoring the balance between sales volume, inventory and our increasing production and new product development capabilities. Strategic M&A: Adding new biopharmaceutical and medical device products to our portfolio and building stronger operational capabilities. M&A-focused business development team already formed; have identified and are pursuing several preliminary targets. Corporate Governance: Working hard to improve our capabilities in areas such as HR, legal and internal audit. Marketing activities patients in our strategic hospitals, with a Sales Force Effectiveness system, with In terms of our reorganized sales focus on IVIG and new products such as our new market access team working force, management plans to launch PCC and Fibrinogen. In parallel, we will to get our products listed in those professional promotional efforts toward screen and identify new high-potential hospitals effectively. the education of both doctors and hospitals via our newly established 14 Annual Report 2018 Financial Highlights 12.7% Hyperimmunoglobulin 24.3% IVIG Sales Breakdown By Products 2018 32.0% Human albumin 14.6% Placenta Polypeptide 8.7% Artificial Dura Mater 7.7% Others Human albumin and IVIG products have long been our two largest sales contributors, and our market share for these two products rank among the top three domestic suppliers in China as measured by total production volume in 2018. Additionally, several other new products launched in recent years, such as Factor VIII and PCC, are also rapidly growing market share. Market Share for Select Products CBPO 6% CBPO 13% Other domestic player 1 Other domestic player 2 Others Foreign Player A Others Foreign Player E Foreign Player D Human Albumin Foreign Player C Foreign Player B IVIG Other Player 1 Other Player 2 We are one of top 3 domestic players in each of China albu- min, IVIG, Factor VIII and PCC markets in 2018. Source: Company estimates on 2018 production volume based on the public release of government batch approval data. CBPO 21% CBPO 40% Others Other Player 2 Factor VIII PCC Other Player 2 Other Player 1 Other Player 1 Annual Report 2018 15 Annual Report 2018 15 Total revenue ($ In Millions) Non-GAAP Operating income ($ In Millions) CAGR = 17.7% CAGR = 11.1% 466.9 168.3 171.6 177.7 370.4 341.2 144.7 116.6 296.5 243.3 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Operating Cash Flow ($ In Millions) Non-GAAP Net Income ($ In Millions) Non-GAAP EPS ($) CAGR = 2.7% 109.4 93.5 123.3 102.2 103.9 CAGR = 17.9% 141.2 145.9 126.8 100.1 75.6 5.0 4.5 4.0 3.7 2.9 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 16 Annual Report 2018 Business Highlights Plasma Source 1 February 2018 Received approval from Hainan Province to build a new plasma collection station in Wenchang City March 2018 Received operating permit at the Daming plasma collection station July 2018 Received approval from Shandong Province to build a new plasma collection station in Linqu City Received operating permit for Feicheng branch plasma collection facility August 2018 Extended collaboration agreement with Xinjiang Deyuan for another 3 years to purchase at least an additional 500 tonnes of plasma The Daming plasma collection station commenced operations in March in Hebei Province. R&D 2 January 2018 Launched first batch of Human Fibrinogen into market June 2018 Obtained approval from CFDA to begin human clinical trials on Human Fibrin Sealant product November 2018 Obtained the approval for clinical trial of Guizhou Taibang’s new generation IVIG The Feicheng plasma collection branch facility commenced operations in July in Shandong Province. The new R&D center in Shandong facility M&A 3 January 2018 Acquired 80% equity interest in TianXinFu TianXinFu Manufacturing Facility Annual Report 2018 17 Private Placement 5 August to September 2018 Issued 5,850,000 ordinary shares to raise aggregate gross proceeds of approximately US$590 million Manufacturing facility 4 February 2018 Obtained GMP certificate for the new Shandong facility and commenced commercial production The New Shandong Manufacturing Facility 18 Annual Report 2018 Acquisition of TianXinFu Benefit to CBPO’s Plasma Business The acquisition of TianXinFu will enable CBPO to rapidly ramp up high-end plasma products and to broaden hospital penetration to over 1,000 additional hospitals Enhances CBPO’s existing medical marketing function by leveraging the well-established marketing and academic promotional expertise of TianXinFu team with strong medical backgrounds to penetrate into a wider range of hospital departments, especially cardio surgery and other surgery departments, to educate Bio-artificial dura mater market On January 1, 2018, CBPO completed in China (2016) acquisition of 80% equity interest in Foreign Player C Foreign Player B Tianxinfu (Beijing) Medical Appliance Co., Ltd. (“TianXinFu”) from PW Medtech TianXinFu ~35% Group Limited (“PWM”). Foreign Player A Others Domestic Player 3 Domestic Player 2 TianXinFu mainly engages in the manufacturing and sale of regenerative medical biomaterial products, including Domestic Player 1 mater products. TianXinFu is a market leader in its core product, artificial dura mater, which has been widely used in brain surgeries. In 2018, TianXinFu contributed to approximately 10% of total sales, 12% of total income from operations, and 10% of total net income of China Biologic. artificial dura mater and spinal dura Expands CBPO’s sales network TianXinFu also has several products in its pipeline to help ensure future sustainable Leverages TianXinFu’s marketing growth. As these products launch in the future, TianXinFu will further improve its position in the tissue repair market. TianXinFu Main Pipeline Products Products Preclinical Research Clinical Trial Preparation & Application Clinical Trial Second generation artificial dura mater Absorbable oral repair membrane for oral and maxillofacial surgery Bio-artificial membrane for repairing maxillofacial bone defect Bio-artificial intraocular pressure maintenance membrane for ophthalmic surgery Biological bone matrix Registration doctors on CBPO’s products and to gain direct access to key opinion leaders in relevant fields Enables CBPO to launch its perioperative therapeutics, including PCC, newly launched fibrinogen, and the pipeline product fibrin sealant at neurosurgery and other surgical departments covered by TianXinfu Annual Report 2018 19 Our Major Products Plasma Products Human Albumin Mainly used in the treatment of shock caused by blood loss trauma or burn, raised intracranial pressure caused by hydrocephalus or trauma, oedema or ascites caused by hepatocirrhosis and nephropathy; prevention and treatment of low-density-lipoproteinemia and Neo- natal hyperbilirubinemia. Human Immunoglobulin for In- travenous Injection Human Hepatitis B Immuno- globulin Mainly used in the prevention of measles and contagious hepatitis. When applied together with antibiotics, its curative effect on certain severe bacteria or virus infection may be improved. Mainly used in the treatment of prima- ry immunoglobulin deficiency, such as X chain low immunoglobulin, familiar variable immune deficiency, immunoglob- ulin G secondary deficiency; secondary immunoglobulin deficiency, such as severe infection, newborn sepsis; and auto-immune deficiency diseases, such as Idiopathic thrombocytopenia purpura or kawasaki disease. 20 Annual Report 2018 Human Tetanus Immunoglobulin Human Rabies Immunoglobulin Human Immunoglobulin Mainly used for the prevention and therapy of tetanus, and is particularly applied to patients who have allergic reactions to tetanus antitoxin. Mainly for passive immunity from bites or claws by rabies or other infected animals. All patients suspected of being exposed to rabies will be treated with a combined dose of rabies vaccine and human rabies immunoglobulin. Mainly used in the treatment of primary immunoglobulin deficiency, such as X chain low immunoglobulin, familiar variable immune deficiency, immu- noglobulin G secondary deficiency; secondary immunoglobulin deficiency, such as severe infection, newborn sepsis; and auto-immune deficiency diseases, such as Idiopathic thrombocy- topenia purpura or kawasaki disease. Human Coagulation Factor VIII Mainly used for correcting the disorder of coagulation due to deficiency of Factor VIII; mainly for prevention and control of bleeding in patients with hemophilia A or acquired Factor VIII deficiency, and for treatment of bleeding caused by operation on these patients. Human Fibrinogen Mainly used to treat: (a) congenital fibrinogen reduction or deficiency and (b) acquired fibrinogen deficiency associ- ated with serious liver damage, cirrhosis, disseminated intravascular coagulation, or coagulation disorder resulting from the lack of fibrinogen related to postpar- tum hemorrhage, major surgery, trauma, or acute bleeding. Human Prothrombin Concen- trate Complex Mainly used for the treatment of congenital and acquired clotting factor II, VII, IX, X deficiency (single deficiency or combined deficiency), including: the clotting factor II, VII, IX, X deficiency, including Hemophilia B; Excessive anti- coagulant, and vitamin K deficiency; the mechanism of coagulation disorders and bleeding caused by liver disease when the patients need to correct blood coagulation dysfunction; a variety of reasons caused by the prothrombin time prolong and the patients intend to go for surgery, but the lack of clotting factor may be rejected; treatment for the bleeding symptoms of Hemophilia A who has produced inhibitor of clotting factor VIII; reversing hemorrhage induced by coumarin anticoagulants. Annual Report 2018 21 Non-Plasma Products Artificial Dura Mater Placenta Polypeptide Dura substitutes which are used when the patients’ dura cannot be sutured satisfactorily and watertight closure is difficult to achieve. Mainly used in the treatment of cell immunity deficiency diseases, viral infec- tion and leucopenia caused by various reasons, and assists in postoperative healing. 22 Annual Report 2018 Research & Development - Plasma Products Innovation focuses on: New products through internal R&D and partnership with international players Continue to improve yield for existing products Enhancing product quality through new technologies Continual improvement in production methods Products Currently in Development Treatment / Use Status of Product Development Stage* Human coagulation factor IX Prevention and control of bleeding in Completed the clinical trial and patients who suffer from hemophilia B. preparing documentation for the registration purpose. Immune Globulin Intravenous Treatment for original immunoglobulin Obtained approval for (Human), Caprylate/Chromatography deficiency; secondary immunoglobulin clinical trial by the NMPA. Purified and 20 nm virus filtration deficiency and auto-immune deficiency diseases. Human Antithrombin III (concentration) Treatment for (1) hereditary Obtained approval for clinical antithrombin III deficiency in connection trial by the NMPA. Commenced with surgical or obstetrical procedures clinical trial program. and (2) thromboembolism. Human Cytomegalovirus Prophylaxis and treatment of CMV Obtained approval for clinical Immunoglobulin infection, especially for the prevention trial by the NMPA. In the process of active virus replication for patients of collecting Cytomegalovirus in immunosuppression, such as specialty plasma. organ transplantation patients. Human Fibrin Sealant Adjunct to hemostasis on patients Obtained approval for undergoing surgery in case that clinical trial by the NMPA. 4 3 3 3 3 traditional surgical techniques (such as suture, ligature or cautery) are ineffective or impractical. Note : Stage 4: Registration; Stage 3: Clinical trials; Stage 2: Clinical trial application; Stage 1: Pre-clinical research These products do not include the products in R&D of our newly acquired TianXinFu subsidiary. Annual Report 2018 23 Corporate Social Responsibility As a leading plasma-based CBPO has also sponsored scholarships biopharmaceutical company in China, for students from low-income families China Biologic is committed to fulfilling and donated to flood relief efforts. its role as a caring and responsible corporate citizen focused on ensuring that patients have access to life-saving drugs. The Company’s efforts align with and support its mission of saving and enhancing the quality of its patient’s lives. Since its founding in 2002, China Biologic has actively engaged in various social activities to help the disadvantaged and to support low- income patient families. From April 2016, CBPO has participated in the ‘fused in blood, embraced in love’ project, co-sponsored by local government agencies and charity organizations including the Shandong Poverty Alleviation Office, to help underprivileged hemophilia patients and to improve the effectiveness of poverty alleviation in the rural villages of Shandong Province. As of year-end 2018, CBPO has donated over 5 million yuan worth of medicine and rescue funds to around 150 hemophilia patients. 24 Annual Report 2018 Board of Directors Mr. Joseph Chow Chairman Mr. Chow has been a member of our Board since November 3, 2014 and our Chairman since February 3, 2019. Mr. Chow has over 20 years of experience in corporate finance, financial advisory and management and has held senior executive and managerial positions in various public and private companies. Mr. Chow is a managing director of Centurium Capital. Previously Mr. Chow was a managing director of Moelis and Company and a managing director at Goldman Sachs (Asia) LLP. Prior to that, he served as an independent financial consultant, as chief financial officer of Harbor Networks Limited, and as chief financial officer of China Netcom (Holdings) Company Limited. Prior to that, Mr. Chow served as the director of strategic planning of Bombardier Capital, Inc., as vice president of international operations of Citigroup and as the corporate auditor of GE Capital. Mr. Chow is currently an independent non-executive director for China ZhongDi Dairy Holdings Company Limited, a company listed on the Stock Exchange of Hong Kong. Mr. Chow obtained a Bachelor of Arts degree in political science from Nanjing Institute of International Relations and a Master of Business Administration degree from the University of Maryland at College Park. Dr. Bing Li Director, Chief Executive Officer Dr. Li has been a member of our Board since July 25, 2018 and our chief executive officer since August 13, 2018. He previously served on our Board from February 2011 to May 2014. Dr. Li served as a managing director of Fosun Group, a Chinese international conglomerate and investment company, from March 2016 to December 2017 and a vice president of Shanghai Fosun Pharmaceutical (Group) Co., Ltd., a Chinese pharmaceutical products manufacturer, from May 2014 to February 2016. Prior to that, Dr. Li served as an executive director of Warburg Pincus Asia LLC (“Warburg Pincus”), an American private equity firm, from June 2010 to May 2014 and as a general manager of GlaxoSmithKline, a British pharmaceutical company, from August 2006 to June 2010. From 1999 to 2006, Dr. Li held multiple roles in Eli Lilly and Company, a global pharmaceutical company, including manager, strategic sourcing consultant, associate consultant and business development associate. Dr. Li received a B.S. in biophysics from Fudan University, a Ph.D. in Cell and Molecular Biology from University of Rochester, and a MBA and MEM from Northwestern University. Annual Report 2018 25 Mr. David Hui Li Director Mr. Li has been a member of our Board since November 4, 2013 and served as our Chairman from July 2018 to January 2019. Mr. Li is also the founder and chief executive officer of Centurium Capital. Mr. Li was an executive director and a managing director at Warburg Pincus from February 2002 to January 2016. Prior to joining Warburg Pincus, Mr. Li worked in the investment banking division of Goldman Sachs from 2001 to 2002 and Morgan Stanley from 1994 to 2001. Mr. Li received a B.S. in economics from Renmin University of China and an M.B.A. from Yale University School of Management. Ms. Yue’e Zhang Director Director Ms. Yue’e Zhang was appointed as a director on our Board on January 1, 2018, pursuant to the investor rights agreement dated as of January 1, 2018 by and between the Company and PW Medtech Group Limited, a major shareholder of the Company. Ms. Zhang has worked in the medical device industry for over 20 years and has accumulated considerable experience in product design, research and development, and management and investment. She currently serves as the chairman of the board and an executive director of PW Medtech Group Limited, a company listed on the Hong Kong Stock Exchange. She is also a founder and shareholder of Lepu Medical Technology (Beijing) Co., Ltd., a company listed on the Shenzhen Stock Exchange. Ms. Zhang obtained a bachelor’s degree in material science and engineering from Xi’an Jiaotong University, and two master degrees in material science and management from Xi’an University of Technology and Florida International University, respectively. Mr. Sean Shao Independent Director, Chairman of Audit Committee Mr. Shao has been a member of our Board since July 24, 2008. In addition to his roles with us, Mr. Shao currently serves as independent director and chairman of the audit committee of: 21Vianet Group, Inc., a carrier-neutral internet data center services provider listed on Nasdaq since August 2015; Jumei International Holding Ltd., an e-commerce company listed on NYSE since May 2014; LightInTheBox Holdings Co. Ltd., an e-commerce company listed on NYSE since June 2013; and UTStarcom Holdings Corp., a provider of broadband equipment and solutions listed on Nasdaq since October 2012. He served as the chief financial officer and a board member of Trina Solar Limited from 2006 to 2008 and from 2015 to 2017, respectively. In addition, Mr. Shao served from 2004 to 2006 as the chief financial officer of ChinaEdu Corporation, an educational service provider, and of Watchdata Technologies Ltd., a Chinese security software company. Prior to that, Mr. Shao worked at Deloitte Touche Tohmatsu CPA Ltd. for approximately a decade. Mr. Shao received his master’s degree in health care administration from the University of California at Los Angeles in 1988 and his bachelor’s degree in art from East China Normal University in 1982. Mr. Shao is a member of the American Institute of Certified Public Accountants. 26 Annual Report 2018 Dr. Yungang Lu Independent Director Chairman of Governance & Nominating Committee Dr. Lu has been a member of our Board since March 19, 2012. Dr. Lu is a Managing Partner of Fort Hill Capital Limited (“Fort Hill”), an investment partnership focusing on the global equity market. Prior to Fort Hill, Dr. Lu has served as a Managing Director of Seres Asset Management Limited, a Hong Kong-based Asian investment specialist, from August 2009 to October 2016, and a Managing Director of APAC Capital Advisors Limited, an investment manager focusing on Greater China equities, from 2004 to July 2009. Dr. Lu also serves as a director of two listed companies - China Techfaith Wireless Communication Technology Ltd., a handheld device company in China, and Global Cord Blood Corporation, a provider of cord blood storage services primarily in China. Dr. Lu was a research analyst with Credit Suisse First Boston (Hong Kong), a financial services company, from 1998 to 2004, where his last position was the head of China Research, and was a research analyst with JP Morgan Securities Asia, a financial services company, in Hong Kong from 1997 to 1998. Dr. Lu received a B.S. in Biology from Peking University, an M.S. in Biochemistry from Brigham Young University and a Ph.D. in Finance from the University of California, Los Angeles. Mr. Qi Ning Independent Director, Chairman of Compensation Committee Mr. Ning has been a member of our Board since July 25, 2018. Mr. Ning has been an executive director and chief executive officer of Sinnet Cloud Data Co., Ltd., a company specializing in marketing and promoting AWS cloud products and related services in China, since May 2018, a general partner of Tianjin Aman Enterprise Management GP, a consulting and management company, since May 2018 and a managing partner of Intermarket Advisory LLP, a company offering advisory and consulting services to financial institutions in TMT sectors, since January 2018. From August 2012 to December 2017, Mr. Ning held multiple roles in 21Vianet Group, a Chinese carrier neutral cyber infrastructure services provider, including senior advisor, executive vice president, chief operating officer, senior vice president and general manager of Blue Cloud Tech Co., Ltd., a wholly owned subsidiary of 21Vianet Group. Prior to that, Mr. Ning served as an executive director and chief executive officer of China Netcom Broadband Corporation Ltd., a joint venture telecom services provider between China Netcom Group Corporation and PCCW, the dominant carriers from North China and Hong Kong, and a managing director of China Broadband Capital, a TMT-focused private equity fund; from June 2004 to August 2008, as an executive director of China Netcom Broadband Corporation Ltd., a Chinese residential broadband services provider; from 1999 to June 2004 as acting general manager of Zhejiang Provincial Branch of China Netcom Group Corporation, vice president of China Netcom Broadband Corporation Ltd., a subsidiary of China Netcom Holding Corp., Ltd., assistant to COO and general manager of Carrier & International Services BU of China Netcom Holding Corp., Ltd., a Chinese telecommunication services provider. Mr. Ning received a Bachelor degree of Engineering in Nuclear Physics and a Master degree of Engineering in Industrial and Innovation Economics from Tsinghua University. Annual Report 2018 27 Annual Report 2018 27  Morningstar® Document Research℠ FORM 20-FChina Biologic Products Holdings, Inc. - CBPOFiled: March 06, 2019 (period: December 31, 2018)Annual and transition report of foreign private issuers under sections 13 or 15(d)The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 20-F (Mark One) ¨REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ¨SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report ___________________ For the transition period from ___________________________ to ___________________________ Commission File No. 001-34566 CHINA BIOLOGIC PRODUCTS HOLDINGS, INC.(Exact name of Registrant as specified in its charter) N/A(Translation of Registrant’s Name Into English) Cayman Islands(Jurisdiction of Incorporation or Organization) 18th Floor, Jialong International Building, 19 Chaoyang Park RoadChaoyang District, Beijing 100125People’s Republic of China(Address of principal executive offices) Bing Li, Chief Executive OfficerTelephone: +86 (10) 6598-311118th Floor, Jialong International Building, 19 Chaoyang Park RoadChaoyang District, Beijing 100125People’s Republic of China(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class Name of each exchange on which registeredOrdinary Shares, par value $0.0001 per sharePreferred Share Purchase Rights Nasdaq Global Select MarketNasdaq Global Select Market Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the Issuer’s classes of capital or common stock as of the close of the period covered by the annual report:39,361,616 ordinary shares, par value $0.0001 per share, as of December 31, 2018. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.x Yes ¨ No Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934.¨ Yes x No Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.x Yes ¨ No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).x Yes ¨ No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See thedefinitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large Accelerated Filer xAccelerated Filer ¨ Non-Accelerated Filer ¨Emerging growth company ¨ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected notto use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of theExchange Act. ¨ † The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its AccountingStandards Codification after April 5, 2012. Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP x International Financial Reporting Standards as issued by the International AccountingStandards Board ¨ Other ¨ If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.¨ Item 17 ¨ Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).¨ Yes x No (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS.) Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities ExchangeAct of 1934 subsequent to the distribution of securities under a plan confirmed by a court.¨ Yes ¨ No Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Annual Report on Form 20-FYear Ended December 31, 2018 TABLE OF CONTENTS PART I Item 1.Identity of Directors, Senior Management and Advisers3Item 2.Offer Statistics and Expected Timetable3Item 3.Key Information3Item 4.Information on the Company17Item 5.Operating and Financial Review and Prospects33Item 6.Directors, Senior Management and Employees43Item 7.Major Shareholders and Related Party Transactions49Item 8.Financial Information50Item 9.The Offer and Listing51Item 10.Additional Information52Item 11.Quantitative and Qualitative Disclosures about Market Risk59Item 12.Description of Securities Other Than Equity Securities59 PART II Item 13.Defaults, Dividend Arrearages and Delinquencies61Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds61Item 15.Controls and Procedures61Item 16A.Audit Committee Financial Expert62Item 16B.Code of Ethics62Item 16C.Principal Accountant Fees and Services63Item 16D.Exemptions from the Listing Standards for Audit Committees63Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers63Item 16F.Change In Registrant’s Certifying Accountant63Item 16G.Corporate Governance63Item 16H.Mine Safety Disclosure63 PART III Item 17.Financial Statements64Item 18.Financial Statements64Item 19.Exhibits64 1 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Special Note Regarding Forward Looking Statements In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, asamended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,”“plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include,among others, those concerning market and industry growth and demand and acceptance of new and existing products; expectations regarding governmentalapprovals of our new products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies andobjectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions,expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of futureperformance and involve risks and uncertainties, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results ofour company to differ materially from those expressed or implied by such forward-looking statements. Risks and uncertainties that could cause actual resultsto differ materially from those anticipated include risks related to, among others, our ability to overcome competition from local and internationalpharmaceutical enterprises; decrease in the availability, or increase in the cost, of plasma; failure to renew plasma collection permits for plasma collectionstations; failure to meet the GMP standard or other mandatory requirements for any of our facilities; failure to obtain PRC governmental approval to increaseretail prices of certain of our biopharmaceutical products; loss of key members of our senior management; and unexpected changes in the PRC government’sregulation of the biopharmaceutical industry in China, or changes in China’s economic situation and legal environment. Additional disclosures regardingfactors that could cause our results and performance to differ from results or performance anticipated by this report are discussed in “Item 3.D. KeyInformation—Risk Factors”. Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attemptto advise interested parties of the risks and factors that may affect our business, prospects, financial condition and results of operations. The forward-lookingstatements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions oramendments to any forward-looking statements to reflect changes in our expectations or future events. Use of Certain Terms Except as otherwise indicated by the context and for the purposes of this report only, references in this report to: ·“China Biologic,” “we,” “us,” the “Company” or “our” are to China Biologic Products Holdings, Inc., an exempted company incorporated under thelaws of the Cayman Islands, and, unless the context requires otherwise, its direct and indirect subsidiaries; ·“China” or “PRC” are to the People’s Republic of China, excluding, for the purposes of this report only, Taiwan and the special administrativeregions of Hong Kong and Macau; ·“Exchange Act” are to the Securities Exchange Act of 1934, as amended; ·“GMP” are to good manufacturing practice; ·“Guizhou Taibang” are to Guizhou Taibang Biological Products Co., Ltd., a PRC company indirectly wholly owned by us, formerly known asGuiyang Qianfeng Biological Products Co., Ltd.; ·“Health Forward” are to Health Forward Holding Limited, a Hong Kong company wholly owned by us; ·“Huitian” are to Xi’an Huitian Blood Products Co., Ltd., a PRC company in which we hold an indirect minority equity interest; ·“MDMEL” are to Medical Device Manufacturing Enterprise License; ·“Nasdaq” are to the Nasdaq Stock Market; ·“NDRC” are to the National Development and Reform Commission of the PRC; ·“NHC” are to the National Health Commission of the PRC, formerly known as the PRC Ministry of Health, or the PRC National Health and FamilyPlanning Commission; ·“NMPA” are to the National Medical Products Administration of the PRC, formerly known as China Food and Drug Administration; ·“PMPA” are to the provincial counterpart of the NMPA; ·“RMB” are to the legal currency of China; ·“SAFE” are to the State Administration of Foreign Exchange of the PRC; ·“SEC” are to the Securities and Exchange Commission; ·“Securities Act” are to the Securities Act of 1933, as amended; ·“Shandong Taibang” are to Shandong Taibang Biological Products Co., Ltd., a PRC company indirectly majority owned by us; ·“Taibang Biological” are to Taibang Biological Ltd., a British Virgin Islands company wholly owned by us, formerly known as Logic Express, Ltd.; ·“Taibang Holdings” are to Taibang Holdings (Hong Kong) Limited, a Hong Kong company indirectly wholly owned by us, formerly known asLogic Holdings (Hong Kong) Limited; ·“TianXinFu” are to TianXinFu (Beijing) Medical Appliance Co., Ltd., a PRC company indirectly majority owned by us since January 1, 2018; ·“U.S. dollars”, “USD” or “$” are to the legal currency of the United States; and ·“Xinjiang Deyuan” are to Xinjiang Deyuan Bioengineering Co., Ltd., a PRC company with which we entered into cooperation agreements topurchase source plasma. 2 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable. ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable. ITEM 3. KEY INFORMATION A. Selected Financial Data Selected Consolidated Financial Data The selected consolidated statement of comprehensive income data for 2018, 2017 and 2016 and the selected balance sheet data as of December 31, 2018and 2017 are derived from our audited consolidated financial statements included elsewhere in this report. The selected consolidated statement ofcomprehensive income data for 2015 and 2014 and the selected balance sheet data as of December 31, 2016, 2015 and 2014 are derived from our auditedconsolidated financial statements not included in this report. The following selected historical financial information should be read in conjunction with our consolidated financial statements and related notes and theinformation contained in Item 5 “Operating and Financial Review and Prospects”. For the Years Ended December 31, / As of December 31, 2018 2017 2016 2015 2014 (U.S. dollars in thousands, except per share data (U.S. dollars), Ordinary shares in Shareholders’ equity (U.S. dollars),and share number)Revenues 466,878 370,407 341,169 296,458 243,252 Income From Operations 146,174 135,858 143,915 132,586 111,159 Net Income 147,969 82,236 128,793 114,106 96,113 Net Income attributable to the Company 128,058 67,943 104,780 89,043 70,917 Earnings Per Share Basic 3.54 2.40 3.79 3.40 2.85 Diluted 3.53 2.38 3.74 3.27 2.71 Total Assets 2,009,979 809,057 604,958 551,466 446,847 Total Current Liabilities 122,349 97,635 73,441 71,655 120,682 Total Long Term Liabilities 42,927 47,097 10,380 12,849 50,904 Ordinary Shares in Shareholders’ Equity 4,162 2,987 2,943 2,884 2,787 Outstanding Shares 39,361,616 27,611,841 27,172,905 26,580,349 24,806,167 Total Shareholders’ Equity attributable to theCompany 1,772,050 598,192 462,200 382,343 212,087 Total Equity 1,844,703 664,325 521,137 466,962 275,262 B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors An investment in our ordinary shares involves a high degree of risk. You should carefully consider the risks described below, together with all of the otherinformation included in this report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition orresults of operations could suffer. In that case, the trading price of our ordinary shares could decline, and you may lose all or part of your investment. Youshould read the section entitled “Special Note Regarding Forward Looking Statements” above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this report. 3 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. RISKS RELATING TO OUR BUSINESS The biopharmaceutical industry in China is strictly regulated and changes in such regulations, including banning or limiting plasma products, may have amaterial adverse effect on our operations, revenues and profitability. We are principally engaged in the research, development, manufacture and sales of human plasma-based biopharmaceutical products in China. Thebiopharmaceutical industry in China is strictly regulated by the government. The regulatory regime regulates the process of administrative approval ofmedicine and its production, and includes laws and regulations such as the PRC Pharmaceutical Law, the Implementation Rules on the PRC PharmaceuticalLaw and the Regulations on the Administration of Blood Products. These laws and regulations require entities producing plasma products to comply strictlywith certain hygienic standards and specifications promulgated by the government. In the event that a plasma product is discovered to be not compliant withthe government’s hygienic standards and specifications, the health department may revoke its approval of such plasma product, or otherwise limit the use ofsuch plasma product. Changes in these laws and regulations, including banning or limiting plasma products, could have a material adverse effect on ouroperations, revenues and profitability. If the biopharmaceutical products we sell are found to be contaminated, our operation, revenues and profitability would be severely and adversely affectedand we may be subject to civil and criminal liabilities. The principal raw material of our existing and planned biopharmaceutical products is human source plasma, which, due to its unique nature, is subject torisks of contaminations and blood-borne diseases. In addition, current technology cannot eliminate entirely the risk of biological hazards inherent in plasmathat are not currently known or for which screens are not currently commercially available, which could result in a widespread epidemic due to bloodinfusion. If any of our human donors is infected with diseases, then the plasma from such donor may be infected. Although we pre-screen all donors in orderto ensure that they are not infected with HIV and hepatitis C and have not contracted liver diseases, screening tests may fail to identify and exclude from oursupply the plasma from infected donors due to technical limitation and human errors. In addition, we purchase source plasma from Xinjiang Deyuan.Although we perform screening tests on the purchased plasma before putting it into production, we may fail to identify contaminated plasma from XinjiangDeyuan due to the technical limitation and/or human errors. If any contaminated plasma is not appropriately screened out, our entire plasma supply for therelevant plasma collection station may become contaminated. If the plasma from our collection or purchased from Xinjiang Deyuan is contaminated and wesell biopharmaceutical products made from such plasma, we could be subject to civil liability from suits brought by consumers. Further, we may lose ourregistration and have criminal liability if we are found by the government to have been criminally negligent. If this occurs, our business, prospects, results ofoperations and financial condition will be materially and adversely affected. If our supply of quality plasma is interrupted, our results of operations and profitability will be adversely affected. In addition, if we experience anyshortage of raw materials in the future, we may be unable to proceed with our long-term business plan and we may be forced to curtail or cease ouroperations or further business expansion. The production of plasma products relies on the supply of plasma of suitable quality. For 2018, 2017 and 2016, the cost of plasma we used for productionaccounted for approximately 80.4%, 80.9% and 81.5%, respectively, of total production cost of our plasma products. The supply and market prices of plasmamay be adversely affected by factors such as heightened or new regulatory restrictions, higher living standards or outbreaks of diseases, any of which wouldaffect our costs of production. We may not be able to pass on any resulting increase in costs to our customers and therefore any substantial fluctuation insupply or market prices of plasma may adversely affect our results of operations and profitability. Our production volume, capacity utilization and future expansion are affected by a contraction in the supply of raw materials, especially plasma. In additionto the plasma collected from our own plasma collection stations, we also outsource plasma from Xinjiang Deyuan pursuant to a cooperation agreemententered into in August 2015 and supplemented by a supplementary agreement entered into in August 2018. Under these agreements, Xinjiang Deyuan hadsold us more than 500 tonnes of source plasma in batches from August 2015 to August 2018 and agreed to sell to us no less than 500 tonnes of source plasmaover a three year period from August 2018 to August 2021. As of December 31, 2018, 652 tonnes of plasma under these agreements had been delivered to us.We cannot assure you, however, that Xinjiang Deyuan will always deliver the source plasma on schedule or such plasma will always pass our qualityinspection. In addition, there is a possibility that such contract might not be extended after August 2021. If we experience any shortage of plasma supply orfail to secure sufficient plasma supply for our production, we may not be able to fully utilize our production capacity or proceed with our expansion plans. In addition to plasma products, we also manufacture and sell placenta polypeptide products, which use placenta as the main raw material, and regenerativemedical biomaterial products, including artificial dura mater and spinal dura mater products, which use extracted collagen as the main raw material. If weexperience any shortage of these raw materials in the future, our business and results of operations may also be adversely affected. We may not be able to carry on our business if we lose any of the required permits and licenses. Shandong Taibang, Guizhou Taibang, and Huitian, a company in which we hold an indirect minority equity interest, manufacture plasma products and arerequired to obtain from various PRC governmental authorities certain permits and licenses, including permits for pharmaceutical manufacturing and GMPcertificates for each of our production facilities, as well as pharmaceutical distribution permits. TianXinFu, a medical device company we acquired in January 2018, is also required to obtain certain permits and licenses, including registration certificateof medical devices and Medical Device Manufacturing Enterprise License (“MDMEL”) for its production activities, as well as Permit for Medical DeviceOperation. We have obtained permits and licenses and GMP certificates as well as MDMEL required for the manufacturing and sales of our products. Our permits andlicenses are subject to periodic renewal and/or reassessment by the relevant PRC governmental authorities, and the compliance standards may change fromtime to time. We intend to apply for the renewal of such permits and licenses when required by applicable laws and regulations. However, we cannotguarantee that we will be able to renew such permits and licenses in a timely manner, or at all. If we are unable to renew our permits and licenses or fail aninspection which would impair our permits and licenses, our business, prospects, financial condition and results of operations may be materially andadversely affected. In addition, any changes in compliance standards, or any new laws or regulations that may prohibit or restrict our business activities or increase ourcompliance costs may adversely affect our operations and profitability.Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 4 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We may fail to obtain, maintain or renew required licenses and permits for our plasma collection stations. In addition, if we fail to adequately monitor ourplasma collection stations, follow proper procedures or comply with safety requirements, we may be subject to sanctions by the government, or civil orcriminal liabilities. We currently operate fifteen plasma collection stations (including two branch collection facilities) through Shandong Taibang and two plasma collectionstations through Guizhou Taibang. Huitian, a company in which we hold a minority interest, operates three plasma collection stations in Shaanxi Province.To enable growth in our sales, we are seeking opportunities to build more plasma collection stations. The operation of plasma collection stations, however, ishighly regulated and we cannot assure you that we will be able to obtain, maintain and renew the required licenses and permits for existing and new plasmacollection stations in desirable locations or in a timely manner, if at all. For example, we have experienced difficulties and delays in renewing the businesslicenses and collection permits for five existing plasma collection stations we acquired in Guizhou Province. While we monitor our plasma intake proceduresthrough frequent unscheduled inspections of our stations, there remain risks that our plasma collection stations may fail to comply with hygiene andprocedural requirements for plasma screening, collection, storage and tracking. If we fail to comply with any of these requirements, we may lose our plasmacollection permits or incur criminal liability if we are found by the government to have been criminally negligent. In the case of plasma contamination, wemay also be subject to civil liability from suits brought by consumers of our biopharmaceutical products. In addition, failure to comply with hygiene andprocedural requirements may cause harm to donors, who may contract diseases from other donors, among other things. Any such incident may subject us togovernment sanctions, or civil or criminal liabilities. If any of these events were to occur, our business, reputation and prospects would be materially andadversely affected. Our operations, sales, profit and cash flow will be adversely affected if our plasma products fail to pass inspection in a timely manner. The PRC regulatory authorities inspect each batch of our plasma products before we can ship it to our customers. The NMPA has quality standards whichrequire the regulators to assess, among other things, the appearance, packing capacity, thermal stability, pH value, protein content and purity of the product.We must strictly comply with relevant rules and regulations throughout the lifecycle of each product, including plasma collection, delivery, production andpackaging. Regulators typically take more than a month to inspect one batch of plasma products. The process begins when the regulator randomly selectssamples of our products and delivers them to the PRC National Institute for the Control of Pharmaceutical and Biological Products, or NICBPB, for testing,and the process ends when the products are given final approval by NICBPB. In the event that the regulators delay the approval of or reject our products orchange the requirements such that we are unable to comply, our operations, sales, profit and cash flow will be adversely affected. Current or worsening economic conditions may adversely affect our business and financial condition. We currently generate sufficient operating cash flows which provide us with significant working capital. However, any uncertainty arising out of economicconditions may affect our ability to manage normal relationships with our customers, suppliers and creditors and adversely affect our results of operations,cash flows and financial condition, or those of our customers, suppliers and creditors. Current or worsening economic conditions may adversely affect theability of our customers to pay for our products, and curtail their spending on healthcare generally. This could result in a decrease in the demand for ourproducts, declining cash flows, longer sales cycles, slower adoption of new technologies and increased price competition. These conditions may alsoadversely affect certain of our suppliers, which could cause a disruption in our production capacities. Such reductions and disruptions could have a materialadverse effect on our business operations. Our inability to successfully research and develop new biopharmaceutical products could have an adverse effect on our future growth. We believe that the successful development of biopharmaceutical products can be affected by many factors. Products that appear to be promising in the earlyphases of research and development may fail to be commercialized for various reasons, including the failure to obtain the necessary regulatory approvals. Inaddition, the research and development cycle for any new medicine is a relatively lengthy process. In our experience, the process of conducting research andvarious tests on new products before obtaining a new medicine certificate from the NMPA and subsequent procedures may take approximately three to fiveyears, or even longer. For example, in October 2017, we received from the NMPA approval for commercial manufacturing and the GMP certificate of humanfibrinogen product, for which the pre-clinical research started in 2008 and the approval for Phase III clinical trials was received in 2012. We cannot assureyou that our future research and development projects will be successful or that they will be completed within the anticipated time frame or budget. Also, wecannot guarantee that we will receive the necessary approvals from relevant authorities for the production of our newly developed products. Even if suchproducts could be successfully commercialized, we cannot assure you that they will be accepted by the market as anticipated. We do not have discretion to increase the prices of certain of our products, which are subject to the regional government tendering mechanism and/orreimbursement ceilings. Prices of certain pharmaceutical products are subject to various price-related regulations in China. Although the NDRC removed the retail price ceilings forall drug products (except for anesthetics and category I antipsychotics) in China in 2015, the pricing of our plasma products is still subject to provincial andlocal tendering mechanisms where we compete with other manufacturers in the price and quality of products. Among our plasma products, tetanusimmunoglobulin, Factor VIII and PCC are included on the life-saving EDL in most Chinese provinces, for which drug procurement was prioritized and thehospitals are allowed to directly purchase drugs from manufacturers through an on-line procurement process. Other plasma products such as albumin andIVIG and certain of our medical device products are subject to tendering process in most provinces. During the past two to three years, PRC centralgovernment implemented a series of healthcare reform measures, and regional governments adopted various forms of tendering policies accordingly.Although currently there is no standardized tendering rule across the country and the tendering prices for most of our products remain comparatively stable,some provinces may adopt a policy of on-line disclosure of tendering prices, which may narrow the differences in tenders among different provinces andmake the tendering practice more uniform across the country. This may increase the price pressure since provinces intend to benchmark to the lowestnationwide prices. The relevant authorities may also set up tendering rules such as centralized procurement to stimulate manufactures to cut prices in order toensure their products being included in the regional procurement list or improve the procurement volume of their products. In addition, retail prices of pharmaceutical products fully or partially covered under the national insurance system are also affected by the reimbursementceilings set out in the National Reimbursement Drug List, or the NRDL, which may be adjusted by the NDRC from time to time. A new edition of the NRDLwas launched in February 2017. Seven of our principal products (namely human albumin, IVIG, human rabies immunoglobulin, human tetanusimmunoglobulin, factor VIII, PCC and human immunoglobulin) are included in the NRDL. Moreover, the reimbursable amount for each drug under theprovincial drug reimbursement list is subject to each provincial social security funding situation and could be adjustable periodically. These reimbursementceilings put pressure on the manufacturers’ pricing of the relevant products. Similarly, certain of our medical device products are also subject to provincial orSource: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.regional limitation on reimbursable amount. See “Item 4.B. Information on the Company—Business Overview—Business—Regulation” for further details. 5 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Because of the tender process and the reimbursement ceiling for certain of our products, we do not have discretion to increase the prices we charge ourcustomers and distributors for such products above certain levels. We may not be able to increase our prices even if the cost of manufacturing our productsincreases as a result of increases in the cost of raw materials or other costs, and, our revenue and profitability would be adversely affected. If the margin of anyof these products becomes prohibitively low, we may stop manufacturing such product, which may further adversely affect our revenue and profitability. Our ability to increase the prices of our products is limited by general market conditions and intense competition. Our pricing practices may also be affected by the general market conditions and intense competition. To the extent the demand for our products declines orcompetition intensifies, we may decide to respond by reducing our prices in order to capture the declining market demand and maintain the competitivenessof our products. See also “Item 3.D. Key Information—Risk Factors—Risks Relating to Our Business—We are subject to intense competition and mayencounter increased competition from both local and overseas pharmaceutical enterprises if PRC regulators relax the approval process for plasma products orinternational trade restrictions. A change in our competitive environment could adversely affect our profitability and prospects” below. If the margin of anyof our products becomes prohibitively low, we may stop manufacturing such product, which may further adversely affect our revenue and profitability. Our ability to distribute our products is limited by PRC healthcare reform measures. During the past two to three years, the PRC government initiated a series of healthcare reform measures, including but not limited to the prohibition on drugsale mark-ups in public hospitals, the limitation on the ratio of drug sale revenue to total revenue in public hospitals, and the two-invoice policy in drug andmedical device distribution channels. Pursuant to the no mark-up policy of the central government, all public hospitals in China had cancelled the 15% mark-ups on drug sales by the end of 2017.Since then, we have seen a substantial drop in public hospitals’ operational budgets, which has negatively impacted those hospitals’ incentive to purchasedrugs. In addition, the central government requires the drug sales revenue of each public hospital to be no more than 30% of its total revenue. In order to complywith such rule, the hospitals implemented measures such as requiring doctors to prescribe drugs only in accordance with approved indications shown on thedrug label. As most of our products have high unit prices, we have experienced a reduction in the purchase volumes of our products, in particular albuminand IVIG products, by a number of hospitals since the end of 2017. In 2019, the central government may implement a series of indicators for performanceappraisal at hospital level to better monitor the effectiveness of treatment and efficiency of prescription, which might replace the single indicator of drugsales revenue percentage. These new policies could possibly slow down the volume growth of our major products. Also as part of the healthcare reform, the two-invoice policy system in the pharmaceutical and medical device supply chains was designed to limit thenumber of distribution layers between manufacturers and hospitals with the aim of stabilizing prices and enhancing transparency. The two-invoice policy fordrugs has been formally implemented in all provinces in China and the implementation of such policy for medical devices has commenced in certainprovinces. Many pharmaceutical and medical device manufacturers used to sell their products through multiple layers of distributors. Under the new two-invoice policy, manufacturers can only sell products to one layer of distributors (with one invoice issued), which then directly sell to the hospital customers(with the second invoice issued). As a result, many regional smaller distributors who have less access to hospital customers are no longer able to continuetheir businesses. This in turn intensifies competition among product manufacturers for access to competent large distributors. Our sales model for plasmaproducts focuses on direct sales to hospitals and inoculation centers, which is complemented by distributor sales mostly with one layer of distributor betweenhospital and us, so our plasma business has been substantially in compliance with the two-invoice policy. However, the intensified competition partly causedby the implementation of the two-invoice policy in the plasma industry negatively impacted us in both the ex-factory price to distributors and sales volumein 2018. In addition, our placenta polypeptide product used to be sold through multiple layers of distributors to hospitals, and its sales volume shranksignificantly in 2018. For TianXinFu, part of its medical device products have already been sold through only one layer of distributors to hospitals, and wewill adjust our strategy when such policy for medical device is officially implemented in more regions to minimize the effects resulting therefrom, but wecannot ensure that there would not be a negative impact on us. Furthermore, we cannot assure you that the government will not mandate more healthcare reform regulations that may have a negative impact on us. Forexample, at the end of 2018, NHC announced plans to create a national adjuvant drug list for treatments applied as supplements to initial therapies, and setup guidelines that could limit the sales of those drugs. Although we believe that most of our products are essential treatments to many diseases, we cannotassure you that our products would not be included in the regional or national adjuvant drug list. For example, our placenta polypeptide product has beenincluded in many regional adjuvant drug lists and its sales volume has been negatively impacted. If our placenta polypeptide product is included in moreprovincial adjuvant drug lists, its sales volume may be further negatively impacted. If reimbursement or other payment for our current or future products is reduced or modified in the PRC, including through the implementation ofgovernment-sponsored healthcare reform or other similar actions, cost containment measures, or changes to policies with respect to pricing, then ourbusiness could suffer. Sales of our products depend, in part, on the extent to which the costs of our products are paid by public payers. These public payers mainly consist of localgovernments which reimburse the medicines and medical devices covered by the local reimbursement catalog. The local governments update thereimbursement catalog on a regularly basis and may remove certain medicines and medical devices from the reimbursement catalog. These public payers mayalso reduce the reimbursement amounts for certain medicines and medical devices on the reimbursement catalog. These measures by local governments maylimit, reduce or eliminate payments for our products and adversely affect both pricing flexibility and demand for our products. Legislation and regulations affecting reimbursement for our products may change at any time and in ways that may be adverse to us. We cannot predict theimpact of these pressures and initiatives, or any negative effects of any additional regulations that may affect our business. 6 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Some of our owned or leased properties have title defects or non-compliance, which could adversely affect our business operations. Some of our owned or leased properties have title defects or non-compliance. For example, we use properties built on collectively owned rural land for two ofour plasma collection stations. We are also in the process of obtaining the property ownership certificate for another one of our plasma collection stations.Although such title defects and non-compliance have not adversely affected our business operations, we cannot assure you that we will be able to rectify suchdefects and non-compliance in a timely manner or at reasonable costs, if at all. For example, under PRC laws, collectively owned rural land may not be usedfor commercial purposes and we may be required to vacate and seek other space to house our collection facilities. For the collection station built oncollectively owned rural land, under the lease agreement for the collectively owned rural land among us, the local government and the economic collectivewhich owns the land, the economic collective is required to assist us in securing legal rights to use such land. If the economic collective fails to perform itsobligations under the lease agreement, or the lease agreement is deemed to be void, voidable or otherwise unenforceable, or if ownership disputes or claimsregarding the land otherwise arise, we may be required to relocate our collection station. Any disputes or claims relating to our owned or leased properties orland or any efforts in securing alternative sites and properties could divert our resources and management’s attention from our regular business operations. Inaddition, we may not be able to secure alternative sites and properties, if required, in a timely manner or at reasonable costs, which could adversely affect ourbusiness operations. Our financial position and operations may be materially and adversely affected if our product liability insurance does not sufficiently cover our liabilities. Under current PRC laws, manufacturers and vendors of defective products in China may incur liability for loss and injury caused by such products. Pursuantto the General Principles of the Civil Law of the PRC, or the PRC Civil Law, which became effective in 1987, a defective product that causes propertydamage or physical injury to any person may subject the manufacturer or vendor of such product to civil liability. The Product Quality Law of the PRC, or the Product Quality Law, was enacted in 1993 and revised in 2000. The Product Quality Law was enacted to protectthe rights and interests of end-users and consumers and to strengthen the supervision and control of the quality of products. Under the Product Quality Law,manufacturers who produce defective products may be subject to fines and production suspension, and in severe cases, be subject to criminal liability andmay have their business licenses revoked. The PRC Law on the Protection of the Rights and Interests of Consumers, or the Consumers’ Rights Law, was enacted in 1993 to further protect the legalrights and interests of consumers in connection with the purchase or use of goods and services. All businesses, including our business, must observe andcomply with the Consumers’ Rights Law. The Tort Liability Law of the PRC was enacted in December 2009, which imposes liability on manufacturers for damages caused by defects in their products.If the defects are caused by third parties such as transporters or storekeepers, manufactures may be entitled to claim for indemnification or contribution fromsuch third parties for making compensation to the consumers. We maintain two product liability insurance policies for sales in China for Shandong Taibang and Guizhou Taibang’s products in the amount of $2.9 million(RMB20 million) each. We also maintain a product liability insurance policy for sales in China for TianXinFu’s products in the amount of $0.29 million(RMB2 million). If our products are found to be defective and our insurance coverage is insufficient to cover a successful claim against us, our financialposition and operations may be materially and adversely affected. Product liability claims or product recalls involving our products could have a material adverse effect on our business. Our business exposes us to the risk of product liability claims that are inherent in the manufacturing, distribution and sale of biopharmaceutical and medicaldevice products. For example, plasma is a biological substance that is capable of transmitting viruses and pathogens, whether known or unknown. Therefore,our plasma and plasma products, if not properly collected, tested, pathogen-inactivated, processed, stored or transported, could cause serious disease andpossibly death to patients. Further, there are viral and other infections of plasma which may escape detection using current testing methods and which are notsusceptible to inactivation methods. Our other biopharmaceutical and medical device products are also required to be of very high quality as they are used inintravenous injections or surgeries. Any infection of disease by persons using our products could result in claims against us. Since our establishment in 2002,we have been subject to four lawsuits filed by patients who were treated with our products and received blood and/or plasma transfusions. In all of these fourcases, we were ordered to contribute a portion of the compensation for the patients even though the courts did not find that our products were defective orcaused the patients’ illness. The required contribution by us was immaterial in these four cases. We cannot assure you that there will be no future claimsagainst us or that we will always succeed in defending against such claims. Furthermore, the presence of a defect in a product could require us to carry out arecall of such product. A product liability claim, regardless of merit or eventual outcome, or a product recall could result in substantial financial losses, civil and criminal liabilities,administrative sanctions, revocation of business and product permits and licenses, negative reputational repercussions and an inability to retain customers. Ifour products are found to be defective and our insurance coverage is insufficient to cover a successful claim against us, our financial position and operationsmay be materially and adversely affected. We are subject to intense competition and may encounter increased competition from both local and overseas pharmaceutical enterprises if PRCregulators relax the approval process for plasma products or international trade restrictions. A change in our competitive environment could adverselyaffect our profitability and prospects. We face intense competition from local and foreign entities that manufacture and sell products that compete with ours in China. These competitors may havemore capital, better research and development resources, expanded manufacturing and marketing capabilities and more experience than we do. The plasma-based biopharmaceutical manufacturing industry in China is highly regulated, and although we believe that compliance with the regulatory requirementspose a competitive barrier to enter into the Chinese market, over time, however, there may be new entrants. If the government relaxes these restrictions andallows more competitors to enter into the market, these competitors may have more capital, better research and development resources, more manufacturingand marketing capability and experience than us. Our operating results and financial condition may be adversely affected if competition intensifies,competitors reduce prices to gain market share, or competitors develop new products having comparable medicinal applications or therapeutic effects whichare more effective or less costly than ours. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 7 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In addition, we also face competition from imported products. Since 2009, there has been a substantial increase in volume of imported human albumin inChina, which competes in domestic human albumin market. In addition, we compete with foreign biopharmaceutical manufacturers that set up productionfacilities in China and compete directly with us. The increased supply of both domestic and foreign biopharmaceutical products in China may result in lowersales or lower prices for our products. We cannot assure you that we will remain competitive or that our profitability and prospects will not be adverselyaffected. We depend heavily on key personnel, and turnover of key employees and senior management could harm our business. Our success, to a certain extent, is attributable to the expertise and experience of our senior management and key research and technical personnel who carryout key functions in our operation. If we lose the service of any of our senior management or key research or technical personnel or fail to attract additionalpersonnel with suitable experience and qualification, our business operations and research capability may be adversely affected. We have a secondment agreement with the Shandong Institute, which is expected to terminate upon its future privatization, for certain of our employees. Ifthe secondment agreement is breached or terminated, it could have an adverse effect on our operations and on our financial results. Shandong Institute provided us with 27 of our employees, including certain key management personnel, out of our total of approximately 2,187 employeesas of December 31, 2018, pursuant to a secondment agreement dated October 28, 2002, between Shandong Taibang and the Shandong Institute. Pursuant tothe secondment agreement, we are responsible for the salaries of these employees, as well as for their social benefits such as insurance. Our secondmentagreement with the Shandong Institute will expire on the earlier of October 2032 or the privatization of the Shandong Institute, which was originallyscheduled to occur before the end of 2008. However, the privatization of the Shandong Institute has been delayed indefinitely due to delay by the ShandongDepartment of Health in implementing the privatization plan. Upon expiration or termination of the secondment agreement, we plan to hire the secondedemployees directly. However, we cannot assure you that all of the employees will accept our employment offers at that time. Guangli Pang, ShandongTaibang’s chief executive officer, is employed through the secondment agreement. Although none of our seconded employees have indicated that they donot plan to continue working for us after the privatization, if the secondment agreement is terminated or expires and we are unable to hire those employees ortheir replacements on time, our operations, as well as our financial results, may be materially and adversely affected. We may not realize the anticipated benefits of our acquisition of TianXinFu. We may face unknown challenges in integrating the business of TianXinFu with our existing business to realize the anticipated benefits of our acquisition ofTianXinFu. For example, we may not be able to effectively utilize TianXinFu’s sales network and marketing expertise to promote the sale of our existingplasma products due to the sales team’s lack of familiarity with our plasma products and the plasma markets or due to any loss of key sales personnel.Furthermore, we may not be able to introduce our plasma products as perioperative therapeutics to surgical departments covered by TianXinFu as planned. Ifwe fail to realize the anticipated benefits from this acquisition, our liquidity, results of operations, financial condition and share price may be adverselyaffected. In addition, at times, the attention of certain members of our management and resources may be focused on the integration of the businesses anddiverted from day-to-day business operations, which may disrupt our business. The acquisition of TianXinFu may negatively impact our financial results. The acquisition of TianXinFu has been accounted for under the acquisition method of accounting and the assets acquired and liabilities assumed have beenrecorded at their respective fair values at the acquisition date. The excess of the purchase price over those fair values has been recorded as goodwill. If thevalue of goodwill or intangible assets becomes impaired in the future, we may incur material charges relating to such impairment. Such a potentialimpairment charge could have a material impact on our operating results. In addition, a portion of our continuing revenues and earnings per share are derivedfrom the operation of TianXinFu. Therefore, any negative impact on the operations of TianXinFu could potentially harm our operating results. We have limited experience in operating the business of regenerative medical biomaterial products. We have been principally engaged in the research, development, manufacturing and sales of plasma products in China, while our newly acquired business ofTianXinFu focuses on the manufacturing and sale of regenerative medical biomaterial products, mainly artificial dura mater and spinal dura mater products.Our lack of familiarity with the regenerative medical biomaterial industry may make it difficult for us to anticipate the demands and preferences in the marketand to develop products that meet the requirements and preference of customers in a timely and cost-effective manner, or at all. As a result, the operatingresults of TianXinFu may be less desirable than our expectations, which in turn may negatively impact our overall financial position. Future acquisitions may have an adverse effect on our ability to manage our business. Selective acquisitions form part of our strategy to further expand our business. If we are presented with appropriate opportunities, we may acquire additionalcompanies, products or technologies. Future acquisitions and the subsequent integration of new companies into ours would require significant attention fromour management. The diversion of our management’s attention and any difficulties encountered in any integration process could have an adverse effect onour ability to manage our business. Future acquisitions would expose us to potential risks, including risks associated with the integration of new operations,technologies and personnel, unforeseen or hidden liabilities, the diversion of resources from our existing businesses and technologies, the inability togenerate sufficient revenue to offset the costs and expenses of acquisitions, and potential loss of, or harm to, relationships with employees, customers andsuppliers as a result. 8 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We may lose our competitive advantage and our operations may suffer if we fail to prevent the loss or misappropriation of, or disputes over, ourintellectual property or proprietary information. We regard our intellectual property, particularly our patents and trade secrets, to be of considerable value and importance to our business and our success. Werely on a combination of patent, trademark and trade secret laws, as well as confidentiality agreements to protect our intellectual property rights. Failure toprotect our intellectual property rights could harm our brands and our reputation, and adversely affect our ability to compete effectively. Further, enforcing ordefending our intellectual property rights, including our patents and trade secrets, could result in the expenditure of significant financial and managerialresources. As of December 31, 2018, we held 87 issued patents and had 30 pending patent applications in China for certain manufacturing processes and packagingdesigns. We may not be able to successfully obtain the approval of the PRC authorities for our patent applications. As of December 31, 2018, we also had 13trademarks registered in China. While we are not aware of any infringement on our intellectual property and we have not been notified by any third party that we are infringing on theirintellectual property, our ability to compete successfully and to achieve future revenue growth will depend, in significant part, on our ability to protect ourproprietary technologies and operate without infringing upon the intellectual property rights of others. Policing unauthorized use of proprietary technologiesis difficult and expensive. The steps we have taken may not be adequate to prevent unauthorized use of our intellectual property rights. The legal regime in China for the protection of intellectual property rights is still at its early stage of development. Despite many laws and regulationspromulgated and other efforts made by China over the years to tighten up its regulation and protection of intellectual property rights, private parties may notenjoy intellectual property rights in China to the same extent as they would in many more developed countries, including the United States, and theenforcement of such laws and regulations in China has not achieved the levels reached in those countries. The administrative agencies and the court systemin China are not well-equipped to deal with violations or handle the nuances and complexities between compliant technological innovation andnoncompliant infringement. We also rely on confidentiality agreements with our management and employees to protect our confidential proprietary information. However, the protectionof our intellectual property may be compromised as a result of: •departure of any of our management members or employees in possession of our confidential proprietary information; •breach by such departing management member or employee of his or her confidentiality and non-disclosure undertaking to us; •infringement by others of our proprietary information and intellectual property rights; or •refusal by relevant regulatory authorities to approve our patent or trademark applications. Any of these events or occurrences may have a material adverse effect on our operations. We cannot assure you that the steps taken by us to protect our intellectual property rights will be adequate or that third parties will not infringe on ormisappropriate our patents, trademarks, confidential proprietary information or similar proprietary rights. Litigation may be necessary to enforce ourintellectual property rights and the outcome of any such litigation may not be in our favor. Given the relative unpredictability of China’s legal system andpotential difficulties enforcing a court judgment in China, we cannot guarantee that we would be able to halt any unauthorized use of our intellectualproperty through litigation in a timely manner. Furthermore, we cannot assure you that other parties will not assert infringement claims against us, and we may have to pursue litigation against other partiesto assert our rights. Any such claim or litigation could be costly and we may lack the resources required to defend against such claims. If we are unsuccessfulin defending against such infringement claims, we may be required to pay damages, modify our products or suspend the production and sale of such products.We cannot guarantee that we will be able to modify our products on commercially reasonable terms. Finally, any event that would jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse effect on ourability to market or sell our brands, and profitably exploit our products. A disruption in the supply of utilities, fire or other calamity at our manufacturing plant would disrupt production of our products and adversely affect ourbusiness. Our plasma products are manufactured at our production facilities located in Tai’an, Shandong Province and Guiyang, Guizhou Province in China.TianXinFu’s manufacturing of regenerative medical biomaterial products primarily operates in Beijing. While we have not in the past experienced anycalamities which disrupted production, any disruption in the supply of utilities, in particular, electricity or power supply, or any outbreak of fire, flood orother calamity resulting in significant damage at our facilities would severely affect our production and have a material adverse effect on our business,financial condition and results of operations. We maintain insurance policies covering losses with respect to damages to our properties and products. We do not have insurance coverage for most of ourinventories of raw materials or business interruption. We cannot assure you that our insurance would be sufficient to cover all of our potential losses. If we do not maintain strong financial controls, investor confidence in us may decline and our stock price may decline as a result. As required by Section 404 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring every public company to include a management report onsuch company’s internal control over financial reporting in its annual report, which must also contain management’s assessment of the effectiveness of ourcompany’s internal control over financial reporting. In addition, the independent registered public accounting firm auditing the financial statements mustalso attest to the operating effectiveness of our company’s internal controls. A report of our management and attestation by our independent registered public accounting firm is included in our annual report on Form 20-F for the yearSource: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ended December 31, 2018. Our management has concluded that our internal controls over financial reporting as of December 31, 2018 were effective. Wehave in the past discovered, and may in the future discover, material weakness in our internal controls. For example, we identified material weaknesses relatedto review controls on the accounting for income taxes and derivative instrument valuation as described under Item 9A of our annual report on Form 10-K foryear ended December 31, 2010, which were subsequently remediated in 2011 as described under Item 9A of our annual report on Form 10-K for the yearended December 31, 2011. However, we cannot guarantee that these remedies will continue to be effective. Failure to achieve and maintain an effectiveinternal control environment could result in us not being able to accurately report our financial results, prevent or detect fraud or provide timely and reliablefinancial and other information pursuant to the reporting obligations we have as a public company, which could have a material adverse effect on ourbusiness, financial condition and results of operations. This could reduce investors’ confidence in our reported financial information, which in turn couldresult in lawsuits being filed against us by our shareholders, otherwise harm our reputation or negatively affect the trading price of our ordinary shares. 9 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We are treated as a U.S. corporation for U.S. federal tax purposes. Pursuant to Section 7874 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), we are treated as a U.S. corporation for U.S. federal income taxpurposes. As a result, we are subject to U.S. federal corporate income tax as if we were incorporated in the United States. U.S. Holders, as defined below,should consult their tax advisers regarding the U.S. federal income tax consequences of holding our ordinary shares in their particular circumstances. The recently enacted tax reform bill could adversely affect our business and financial condition. On December 22, 2017, President Trump signed into law the “Tax Cuts and Jobs Act,” or the TCJA, which significantly amends the Code. The TCJA, amongother things, reduces the U.S. corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limits the tax deduction for interest expense to 30% ofadjusted earnings, eliminates net operating loss carrybacks, imposes a tax on offshore earnings at reduced rates regardless of whether they are repatriated,allows immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifies or repeals many businessdeductions and credits. We continue to examine the impact these changes may have on our business. Notwithstanding the reduction in the corporate incometax rate, the overall impact of the TCJA is uncertain and our business and financial condition could be adversely affected. The impact of the TCJA on holdersof our ordinary shares is also uncertain and could be adverse. This Form 20-F does not discuss the TCJA or the manner in which it might affect us or ourshareholders. We urge our shareholders to consult with their legal and tax advisers with respect to the TCJA and the potential tax consequences of investingin our ordinary shares. RISKS RELATING TO DOING BUSINESS IN CHINA Changes in China’s political or economic situation could harm us and our operating results. Economic reforms adopted by the PRC government have had a positive effect on the economic development of the country. The reformed economicinfrastructure and legal systems, however, may be subject to abrupt adjustments by the government. These adjustments, especially in the following areas,could either benefit or damage our operations and profitability: •Level of government involvement in the economy; •Control of foreign exchange; •Methods of allocating resources; •International trade restrictions; and •International conflict. The PRC economy differs from the economies of most member countries of the Organization for Economic Cooperation and Development, or the OECD, inmany ways. For example, state-owned enterprises still constitute a large portion of China’s economy, and weak corporate governance and the lack of aflexible currency exchange policy still prevail in China. As a result of these differences, we may not develop in the same way or at the same rate as might beexpected if the PRC economy was similar to those of the OECD member countries. Substantially all of our operations are conducted in China andsubstantially all of our revenues are generated in China. Adverse changes in economic and political policies of the PRC government could have a materialadverse effect on overall economic growth in China, which in turn could materially adversely affect our business. Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us. We conduct substantially all of our business through our operating subsidiaries in China. Our operating subsidiaries are generally subject to laws andregulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based onwritten statutes, and prior court decisions may be cited for reference but have limited precedential value. Since 1979, a series of new PRC laws andregulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal systemcontinues to evolve rapidly, the interpretations of many laws, regulations, and rules are not always uniform, and enforcement of these laws, regulations, andrules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result insubstantial costs and diversion of resources and management attention. Furthermore, the PRC legal system is partly based on government policies and internal rules, some of which are not published in a timely manner or at all,and some of which may have retroactive effects. As a result, we may not be aware of our violation of any of these policies or rules until sometime after theviolation. Such uncertainties, including the uncertainty over the scope and effect of our contractual, property (including intellectual property) and proceduralrights under the PRC legal system could materially adversely affect our business and impede our ability to continue our operations. 10 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The PRC government exerts substantial influence over the manner in which we must conduct our business activities. The PRC government has exercised and continues to exercise substantial control over virtually every sector of the PRC economy through regulation andstate ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to foreign investments,licenses and permits for business operation, foreign exchange, taxation, import and export tariffs, environmental regulations, land use rights, property, andother matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the centralor local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations that wouldrequire additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrallyplanned economy and any regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions inChina or particular regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures. Restrictions on currency exchange may limit our ability to use our revenue effectively. Substantially all of our sales are denominated in RMB, and any future restrictions on currency exchanges may limit our ability to use revenue generated inRMB to fund any future business activities outside China or other payments in U.S. dollars. Although the PRC government introduced regulations in 1996 toallow greater convertibility of the RMB for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents at those banks in China authorized to conductforeign exchange business. In addition, conversion of RMB for capital account items, including direct investments and loans, is subject to governmentalapproval and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that the PRCregulatory authorities will not impose more stringent restrictions on the convertibility of the RMB. Fluctuations in exchange rates could adversely affect our business and the value of our securities. The value of our ordinary shares will be indirectly affected by the foreign exchange rate between the U.S. dollar and RMB and between those currencies andother currencies in which our sales may be denominated. Appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect ourfinancial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Fluctuations in theexchange rate will also affect the relative value of any dividends we issue that will be exchanged into U.S. dollars, as well as earnings from, and the value of,any U.S. dollar-denominated investments we make in the future. Since July 2005, RMB has no longer been pegged to U.S. dollars. Although the People’s Bank of China regularly intervenes in the foreign exchange marketto prevent significant short-term fluctuations in the exchange rate, RMB may appreciate or depreciate significantly in value against U.S. dollars in themedium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessenintervention in the foreign exchange market. Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedgingtransactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we maynot be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange controlregulations that restrict our ability to convert RMB into foreign currencies. Currently, some of our raw materials and major equipment are imported. In the event that the U.S. dollars appreciate against RMB, our costs will increase. Ifwe cannot pass the resulting cost increases on to our customers, our profitability and operating results will suffer. In addition, if our sales to internationalcustomers grow, we will be increasingly subject to the risk of foreign currency depreciation. Restrictions under PRC law on our PRC subsidiaries’ ability to make dividends and other distributions could materially and adversely affect our ability togrow, make investments or acquisitions, pay dividends to you and otherwise fund and conduct our business. Substantially all of our profits are generated by our PRC subsidiaries. However, PRC regulations restrict the ability of our PRC subsidiaries to makedividends and other payments to their offshore parent companies. PRC legal restrictions permit payments of dividends by our PRC subsidiaries only out oftheir accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are also requiredunder PRC laws and regulations to allocate at least 10.0% of their annual after-tax profits determined in accordance with PRC generally accepted accountingprinciples to a statutory general reserve fund until the amounts in such fund reach 50.0% of their registered capital. Allocations to these statutory reservefunds can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. Any limitations on the ability ofour PRC subsidiaries to transfer funds to us could materially limit our ability to grow, make investments or acquisitions that could be beneficial to ourbusiness, pay dividends and otherwise fund and conduct our business. Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRCresident shareholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit the ability of ourPRC subsidiaries to distribute profits to us or otherwise materially adversely affect us. Pursuant to the Circular on Relevant Issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Return InvestmentsConducted by Domestic Residents through Overseas Special Purpose Vehicle, or Circular 37, which was promulgated by SAFE, and became effective on July4, 2014, (1) a PRC resident must register with the local SAFE branch before he or she contributes assets or equity interests in an overseas special purposevehicle, or an Overseas SPV, that is directly established or controlled by the PRC resident for the purpose of conducting investment or financing; and (2)following the initial registration, the PRC resident is also required to register with the local SAFE branch for any major change, in respect of the OverseasSPV, including, among other things, a change in the Overseas SPV’s PRC resident shareholder, name of the Overseas SPV, term of operation, or any increaseor reduction of the Overseas SPV’s registered capital, share transfer or swap, and merger or division. 11 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We have requested the beneficial holders of our ordinary shares who are PRC residents to register with the relevant branch of SAFE in connection with theirequity interests in us and our acquisitions of equity interests in our PRC subsidiaries pursuant to Circular 37 or the predecessor regulation of Circular 37,namely the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip Investmentsvia Overseas Special Purpose Vehicles, as the case may be. Because of uncertainty over how Circular 37 will be interpreted and implemented, and how orwhether SAFE will apply it to us, we cannot predict how it will affect our business operations or future strategies. For example, the ability of our present andprospective PRC subsidiaries to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, maybe subject to compliance with Circular 37 by our PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 37. We also have little controlover either our present or prospective direct or indirect shareholders or the outcome of such registration procedures. Failure of our present or future PRCresident beneficial holders to comply with Circular 37 could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas orcross-border investment activities, limit the ability of our PRC subsidiaries to make distributions or pay dividends or affect our ownership structure, whichcould adversely affect our business and prospects. Failure to comply with PRC regulations regarding the registration requirements for share option plans may subject PRC plan participants or us to finesand other legal or administrative sanctions. Our employees and directors who are PRC residents and who participate in our employees’ share incentive plan are required to register with SAFE andcomplete other procedures through a domestic qualified agent, and to retain an overseas entrusted institution to handle matters in connection with theirexercise or sale of share options. In addition, the PRC agent is required to make amendment registrations with respect to the share incentive plan if there isany material change to the share incentive plan, the PRC agent or the overseas entrusted institution or other material changes. Failure to comply with suchrequirements will subject us or our PRC resident option holders to fines and other legal or administrative sanctions. To date, we have completed the SAFEforeign exchange registration with respect to our share incentive plans, but there can be no assurance that we will be able to continue to do so in the future ifthe requirements are amended or changed, which would make it more difficult for us to incentivize our employees. Furthermore, our employees working in the PRC who exercise share options, or whose restricted shares or restricted share units, or RSUs, vest, will be subjectto PRC individual income tax. Our PRC subsidiaries are required to file documents related to employee share options, restricted shares or RSUs with therelevant tax authorities and to withhold individual income taxes of those employees related to their share options, restricted shares or RSUs. If the employeesfail to pay, and our PRC subsidiaries fail to withhold, such PRC individual income taxes, our PRC subsidiaries may face sanctions imposed by the PRC taxauthorities. We may be unable to complete a business combination transaction efficiently or on favorable terms due to complicated merger and acquisitionregulations. In August 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission, or CSRC, promulgated the Regulation on Mergers andAcquisitions of Domestic Companies by Foreign Investors, or Circular 10, which became effective in September 2006 and was amended in June 2009. Thisregulation, among other things, governs the approval process by which a PRC company may participate in an acquisition of assets or equity interests.Depending on the structure of the transaction, Circular 10 requires the PRC parties to make a series of applications and supplemental applications to thegovernment agencies. In some instances, the application process may require the presentation of economic data concerning a transaction, includingappraisals of the target business and evaluations of the acquirer, which are designed to allow the government to assess the transaction. Government approvalswill have expiration dates by which a transaction must be completed and reported to the government agencies. Compliance with Circular 10 is likely to bemore time-consuming and expensive than in the past and the government can now exert more control over the combination of two businesses. Accordingly,due to Circular 10, our ability to engage in business combination transactions has become significantly more complicated, time-consuming and expensive,and we may not be able to negotiate a transaction that is acceptable to our shareholders or sufficiently protect their interests in a transaction. Circular 10 allows PRC government agencies to assess the economic terms of a business combination transaction. Parties to a business combinationtransaction may have to submit to the PRC Ministry of Commerce, or MOFCOM, and other relevant government agencies an appraisal report, an evaluationreport and the acquisition agreement, all of which form part of the application for approval, depending on the structure of the transaction. The regulationsalso prohibit a transaction at an acquisition price obviously lower than the appraised value of the PRC business or assets and in certain transaction structures,require that consideration must be paid within defined periods, generally not in excess of a year. The regulation also limits our ability to negotiate variousterms of the acquisition, including aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions andprovisions relating to the assumption and allocation of assets and liabilities. Transaction structures involving trusts, nominees and similar entities areprohibited. Therefore, such regulation may impede our ability to negotiate and complete a business combination transaction on financial terms that satisfyour investors and protect our shareholders’ economic interests. Under the Enterprise Income Tax Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable taxconsequences to us and our non-PRC shareholders. The Enterprise Income Tax Law, or the EIT Law, and its implementing rules became effective on January 1, 2008 and was amended on December 29, 2018.Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,”meaning that it can be treated in a manner similar to a PRC enterprise for enterprise income tax purposes. The implementing rules of the EIT Law define defacto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of theenterprise. On April 22, 2009, State Taxation Administration, or SAT, issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese InvestmentControlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice, which was amendedon January 29, 2014, further interpreting the application of the EIT Law and its implementation on non-PRC enterprise or group controlled by a PRCenterprise or a PRC enterprise group. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a PRC enterprise orgroup will be classified as a “non-domestically incorporated resident enterprise” if (1) its senior management in charge of daily operations reside or performtheir duties mainly in China; (2) its financial or personnel decisions are made or approved by bodies or persons in China; (3) its substantial assets andproperties, accounting books, corporate chops, board and shareholder minutes are kept in China; and (4) at least half of its directors with voting rights orsenior management often reside in China. A resident enterprise would be subject to an enterprise income tax rate of 25.0% on its worldwide income and mustSource: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.pay a withholding tax at a rate of 10.0% when paying dividends to its non-PRC shareholders. However, it remains unclear as to whether the Notice isapplicable to an offshore enterprise not controlled by a PRC enterprise or a PRC enterprise group. Nor are detailed measures on imposition of tax from non-domestically incorporated resident enterprises available. Therefore, it is unclear how the PRC tax authorities will determine tax residency based on the factsof each case. 12 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We may be deemed to be a resident enterprise by PRC tax authorities. If the PRC tax authorities determine that we are a “resident enterprise” for PRCenterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of25.0% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as intereston financing proceeds and non-PRC source income would be subject to PRC enterprise income tax at a rate of 25.0%. Second, although under the EIT Lawand its implementing rules dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt income,” we cannot guarantee that such dividendswill not be subject to a 10.0% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issuedguidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Inaddition, dividends paid by us to non-PRC shareholders may be subject to PRC withholding tax and gains on dispositions of our shares by non-PRCshareholders may be subject to PRC tax. In that case, the tax rate would be 10.0% in the case of non-PRC enterprise shareholder or 20.0% in the case of non-PRC individual shareholder. Finally, if we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. andChina, and our PRC tax may not be creditable against our U.S. tax. We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. According to the Announcement of the State Administration of Taxation on Several Issues Concerning the Enterprise Income Tax on Indirect PropertyTransfer by Non-Resident Enterprises, or SAT Notice 7, promulgated by the SAT on February 3, 2015, as most recently amended on December 29, 2017, andthe Announcement of the State Administration of Taxation on Matters Concerning Withholding of Enterprise Income Tax of Non-Resident Enterprises atSource, or SAT Notice 37, promulgated by the SAT on October 17, 2017, effective on December 1, 2017 and as amended on June 15, 2018, if a non-residententerprise transfers its shares in an overseas holding company, which directly or indirectly owns PRC taxable properties, including shares in a PRC company,via an arrangement without reasonable commercial purpose, such transfer shall be deemed as indirect transfer of the underlying PRC taxable properties.Accordingly, the transferee shall be deemed as a withholding agent with the obligation to withhold and remit the enterprise income tax to the competent PRCtax authorities. Factors that may be taken into consideration when determining whether there is a “reasonable commercial purpose” include, among otherfactors, the economic essence of the transferred shares, the economic essence of the assets held by the overseas holding company, the taxability of thetransaction in offshore jurisdictions, and economic essence and duration of the offshore structure. Under the terms of SAT Notice 7, the transfer which meetsall of the following circumstances shall be deemed as having no reasonable commercial purposes: (i) over 75% of the value of the equity interests of theoffshore holding company are directly or indirectly derived from PRC taxable properties; (ii) at any time during the year before the indirect transfer, over90% of the total properties of the offshore holding company are investments within PRC territory, or in the year before the indirect transfer, over 90% of theoffshore holding company’s revenue is directly or indirectly derived from PRC territory; (iii) the function performed and risks assumed by the offshoreholding company are insufficient to substantiate its corporate existence; and (iv) the foreign income tax imposed on the indirect transfer is lower than thePRC tax imposed on the direct transfer of the PRC taxable properties. SAT Notice 7 also sets out safe harbors for the “reasonable commercial purpose” test. SAT Notice 7 contains an exemption for transfers of shares of a holdingcompany listed outside the PRC, when the shares are acquired and sold in the public market. However, uncertainties exist on testing the reasonable commercial purpose. For example, the relevant authority has not yet promulgated any formalprovisions or formally declared or stated how to calculate the effective tax rates in foreign tax jurisdictions. As a result, we may become at risk of being taxedunder SAT Notice 7 and SAT Notice 37 and the related SAT notices and we may be required to expend valuable resources to comply with SAT Notice 7 andSAT Notice 37 and the related SAT notices or to establish that we should not be taxed under SAT Notice 7 and SAT Notice 37 and the related SAT notices,which could have a material adverse effect on our financial condition and results of operations. We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated theselaws could have a material adverse effect on our business. We are subject to the Foreign Corrupt Practice Act, or FCPA, and other U.S. laws that prohibit improper payments or offers of payments to foreigngovernments and their officials and political parties by U.S. persons and issuers as defined by the relevant statute, for the purpose of obtaining or retainingbusiness. We have operations, agreements with third parties, and make most of our sales in China. PRC anti-corruption laws also strictly prohibit bribery ofgovernment officials. Our activities in China create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents, ordistributors, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by ouremployees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents,or distributors may engage in conduct for which we might be held responsible. Particularly, most of the hospitals and inoculation centers in China are state-owned entities, whose employees may be recognized as foreign government officials for the purpose of FCPA. Therefore, any payments, expensive gifts orother benefits provided to an employee of the state-owned hospital or inoculation center may be deemed violation of FCPA. Violations of FCPA or PRC anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business,prospects, operating results and financial condition. In addition, the U.S. government may seek to hold us liable for successor liability under FCPA violationscommitted by companies in which we invest or that we acquire. If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significantresources to investigate and resolve the matter which could harm our business operations, stock price and reputation and could result in a loss of yourinvestment in our stock, especially if such matter cannot be addressed and resolved favorably. In recent years, U.S. public companies that have substantially all of their operations in China, particularly companies like us which have completed the“reverse merger” transactions, have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatoryagencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities and mistakes, alack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases,allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S.-listed PRC-based companies hassharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits, SECenforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticismand negative publicity will have on us, our business and our stock price. If we become the subject of any unfavorable allegations, whether such allegationsare proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company. This situation willbe costly and time-consuming and distract our management from growing our Company. If such allegations are not proven to be groundless, our Companyand our business operations will be severely impacted and your investment in our stock could be rendered worthless. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 13 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodiesin China. Accordingly, our public disclosure should be reviewed in light of the fact that no governmental agency that is located in China wheresubstantially all of our operations and business are located has conducted any due diligence on our operations or reviewed or cleared any of ourdisclosure. We are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulationspromulgated by the SEC under the Securities Act and the Exchange Act. Unlike public reporting companies whose operations are located primarily in theUnited States, however, substantially all of our operations are located in China. Since substantially all of our operations and business take place in China, itmay be more difficult for the Staff of the SEC to overcome the geographic and cultural obstacles that are present when reviewing our disclosure. These sameobstacles are not present for similar companies whose operations or business take place entirely or primarily in the United States. Furthermore, our SECreports and other disclosure and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosurein our SEC reports and other filings are not subject to the review of the CSRC, a PRC regulator that is tasked with oversight of the capital markets in China.Accordingly, you should review our SEC reports, filings and our other public pronouncements with the understanding that no local regulator has done anydue diligence on our Company and with the understanding that none of our SEC reports, other filings or any of our other public pronouncements has beenreviewed or otherwise scrutinized by any local regulator. Our independent registered public accounting firm may be temporarily suspended from practicing before the SEC if unable to continue to satisfy SECinvestigation requests in the future. If a delay in completion of our audit process occurs as a result, we could be unable to timely file certain reports withthe SEC, which may lead to the delisting of our stock. Substantially all of our sales are to customers in China, and we have all of our operations in China. Like many U.S.-listed companies with significantoperations in China, our independent registered public accounting firm is located in China. On January 22, 2014, Judge Cameron Elliot, an SEC administrative law judge, issued an initial decision suspending the Chinese member firms of the “BigFour” accounting firms, including our independent registered public accounting firm, from practicing before the SEC for six months. In February 2014, theinitial decision was appealed. While under appeal and in February 2015, the Chinese member firms of “Big Four” accounting firms reached a settlement withthe SEC. As part of the settlement, each of the Chinese member firms of “Big Four” accounting firms agreed to settlement terms that include a censure,undertakings to make a payment to the SEC, procedures and undertakings as to future requests for documents by the SEC, and possible additionalproceedings and remedies should those undertakings not be adhered to. If the settlement terms are not adhered to, Chinese member firms of “Big four” accounting firms may be suspended from practicing before the SEC whichcould in turn delay the timely filing of our financial statements with the SEC. In addition, it could be difficult for us to timely identify and engage anotherqualified independent auditor to replace our independent registered public accounting firm. A delinquency in our filings with the SEC may result in Nasdaqinitiating procedures, which could adversely harm our reputation and have other material adverse effects on our overall growth and prospects. Our independent registered public accounting firm’s audit documentation related to their audit reports included in our annual report is located in China.The PCAOB currently cannot inspect audit documentation located in China and, as such, you may be deprived of the benefits of such inspection. Our independent registered public accounting firm issued an audit opinion on the financial statements included in our annual reports filed with the SEC. Ourindependent registered public accounting firm’s audit documentation related to their audit reports included in our annual reports is located in China. Asauditors of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board, or thePCAOB, our auditor is required by the laws of the United States to undergo regular inspections by the PCAOB. However, work papers located in China arenot currently inspected by the PCAOB because the PCAOB is currently unable to conduct inspections without the approval of the PRC authorities. Inspections of certain other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and qualitycontrol procedures, which may be addressed as part of the inspection process to improve future audit quality. However, the PCAOB is currently unable toinspect an auditor’s audit work related to a company’s operations in China and where such documentation of the audit work is located in China. As a result,our investors may be deprived of the benefits of the PCAOB’s oversight of auditors that are located in China through such inspections. The inability of the PCAOB to conduct inspections of an auditor’s work papers in China makes it more difficult to evaluate the effectiveness of any of ourauditor’s audit procedures or quality control procedures that may be located in China as compared to auditors outside of China that are subject to PCAOBinspections. Investors may consequently lose confidence in our reported financial information and procedures and the quality of our financial statements. RISKS RELATING TO OUR ORDINARY SHARES The market price of our ordinary shares is volatile, leading to the possibility of its value being depressed at a time when you want to sell your holdings. The market price of our ordinary shares is volatile, and this volatility may continue. Numerous factors, many of which are beyond our control, may cause themarket price of our ordinary shares to fluctuate significantly. These factors include, among others: •our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations offinancial market analysts and investors; 14 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. •changes in financial estimates by us or by any securities analysts who might cover our stock; •speculation about our business in the press or the investment community, including negative publicity and short seller reports that make allegationsagainst us, even if unfounded; •significant developments relating to our relationships with our customers or suppliers; •stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in our industry; •customer demand for our products; •investor perceptions of our industry in general and our Company in particular; •the operating and stock performance of comparable companies; •general economic conditions and trends; •major catastrophic events; •announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures; •changes in accounting standards, policies, guidance, interpretation or principles; •loss of external funding sources; •sales of our ordinary shares or other securities, including sales by us and by our directors, officers or significant shareholders; •additions or departures of key personnel; and •investor perception of litigation, investigation or other legal proceedings involving us or certain of our individual shareholders or their familymembers. Securities class action litigation is often instituted against companies following periods of volatility in their stock price. This type of litigation could resultin substantial costs to us and divert our management’s attention and resources. Moreover, securities markets may from time to time experience significantprice and volume fluctuations for reasons unrelated to operating performance of particular companies. For example, in July 2008, the securities markets in theUnited States, China and other jurisdictions experienced the largest decline in share prices since September 2001. These market fluctuations may adverselyaffect the price of our ordinary shares and other interests in our Company at a time when you want to sell your interest in us. The provisions in our currently effective memorandum and articles of association and our preferred shares rights agreement might discourage, delay orprevent a change of control of our Company or changes in our management and, therefore depress the trading price of our ordinary shares. Our amended and restated memorandum and articles of association adopted on July 21, 2017 contain provisions that are intended to deter coercive takeoverpractices and inadequate takeover bids by making such practices or bids unacceptably expensive to the raider and to encourage prospective acquirers tonegotiate with our board of directors, rather than to attempt a hostile takeover. These provisions include, among others: •the right of our board of directors to issue preferred shares without shareholder approval; •division of our board of directors into three classes with staggered terms; •rules regarding how shareholders may call shareholder meetings; and •requiring special resolution of the shareholders vote to amend certain provisions of the memorandum and articles of association. On February 22, 2017, our board of directors adopted a preferred shares rights agreement between us and the Securities Transfer Corporation, as the rightsagent, which was amended and restated on July 28, 2017 and further amended on February 20, 2019 (the “Rights Agreement”). The Rights Agreementprovides, among other things, that when specified events occur, our shareholders will be entitled to purchase from us a fraction of a share of series Aparticipating preferred share for each ordinary share they own. Such preferred share purchase rights are triggered by the earlier to occur of (1) 10 business days(or a later date determined by our board of directors before the rights are separated from our ordinary shares) after the public announcement that a person orgroup has become an “acquiring person” by acquiring beneficial ownership of 15.0% or more of our outstanding ordinary shares or (2) 10 business days (or alater date determined by our board of directors before the rights are separated from our ordinary shares) after a person or group begins a tender or exchangeoffer that, if completed, would result in that person or group becoming an acquiring person. The issuance of preferred shares pursuant to the RightsAgreement would cause substantial dilution to a person or group that attempts to acquire us on terms not approved by our board of directors. For moreinformation about the Rights Agreement, see “Item 10.B. Additional Information—Memorandum and Articles of Association—Preferred Shares Rights Plan.” 15 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We do not intend to pay dividends for the foreseeable future. For the foreseeable future, we intend to retain substantially all earnings to finance the development and expansion of our business, and we do not anticipatepaying any cash dividends on our ordinary shares. Accordingly, investors must be prepared to rely on sales of their ordinary shares after price appreciation toearn an investment return, which may never occur. Investors seeking cash dividends should not purchase our ordinary shares. Any determination to paydividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractualrestrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant. Stock prices of companies with business operations primarily in China have fluctuated widely in recent years, and the trading prices of our ordinary sharesare likely to be volatile, which could result in substantial losses to investors. The trading prices of our ordinary shares are likely to be volatile and could fluctuate widely in response to factors beyond our control. For example, if one ormore of the industry analysts or ratings agencies who cover us downgrades us or our ordinary share, or publishes unfavorable research about us, the price ofour ordinary shares may decline. If one or more of these analysts or agencies cease to cover our Company or fail to regularly publish reports on us, we couldlose visibility in the financial markets, which could cause the price of our ordinary shares or trading volume to decline. In addition, the performance andfluctuation of the market prices of other China-based, U.S.-listed healthcare companies may affect the volatility in the price of and trading volume for ourordinary shares. In recent years, a number of PRC-based companies have listed their securities, or are in the process of preparing for listing their securities, onU.S. stock markets. Some of these companies have experienced significant volatility, including significant price declines following their initial publicofferings. The trading performances of the securities of these PRC-based companies’ securities at the time of or after their offerings may affect the overallinvestor sentiment towards PRC-based companies listed in the United States and consequently may affect the trading performance of our ordinary shares.These broad market and industry factors may significantly affect the market price and volatility of our ordinary shares, regardless of our actual operatingperformance. In addition to market and industry factors, the price and trading volume for our ordinary shares may be highly volatile for specific business reasons. Any ofthese factors may result in large and sudden changes in the volume and price at which our ordinary shares will trade. We cannot assure you that these factorswill not occur in the future again. In the past, following periods of volatility in the market price of a company’s securities, shareholders have often institutedsecurities class action litigation against that company. If we were involved in a class action lawsuit, it could divert the attention of senior management, and, ifadversely determined, could have a material adverse effect on our business, financial condition and results of operations. You may have difficulty enforcing judgments against us. We are an exempted company incorporated under the laws of the Cayman Islands. Most of our assets are located in China and most of our current operationsare conducted in China. In addition, most of our directors and officers are nationals and residents of countries other than the United States and substantiallyall the assets of these persons are located outside the United States. As a result, it may be difficult for you to effect service of process within the United Statesupon our PRC operations and these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions of the U.S.federal securities laws against us and our officers and directors. There is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands arenot a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized andenforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced onthe foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b)imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or apenalty, and (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the CaymanIslands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability provisions of the U.S.federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal orpunitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liabilityjudgments from U.S. courts would be enforceable in the Cayman Islands. There is also uncertainty as to whether the PRC courts would recognize or enforce judgments of U.S. courts. Although recognition and enforcement of foreignjudgments are provided for under the PRC Civil Procedures Law, recognition and enforcement of a foreign judgment by PRC courts depend on treaties orreciprocity between China and the country where the judgment is made. China does not have any treaties or other arrangements with the United States thatprovide for the reciprocal recognition and enforcement of U.S. judgments. In addition, according to the PRC Civil Procedures Law, PRC courts will notenforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic principles of PRC law or nationalsovereignty, security, or the public interest. So it is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States. Since we are a Cayman Islands company, the rights of our shareholders may be more limited than those of shareholders of a company organized in theUnited States. Our corporate affairs are governed by our memorandum and articles of association, as amended and restated from time to time, by the Companies Law (2018Revision) of the Cayman Islands (the “Companies Law”), and by the common law of the Cayman Islands. The rights of shareholders to take action against ourdirectors, actions by minority shareholders and the fiduciary duties of our directors to our Company under Cayman Islands law are to a large extent governedby the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in theCayman Islands and from English common law, the decisions of whose courts are of persuasive authority but are not binding on a court in the CaymanIslands. The rights of our shareholders and the fiduciary duties of our directors, although clearly established under Cayman Islands law, are not specificallyprescribed in statute or a particular document in the same way that they are in certain statutes or judicial precedents in some jurisdictions of the United States.In particular, the Cayman Islands has a less developed body of securities laws relative to the United States. Therefore, our shareholders may have moredifficulty in protecting their interests in the face of actions by our management, directors or controlling shareholders than would shareholders of acorporation incorporated in a jurisdiction in the United States. In addition, shareholders of Cayman Islands companies may not have standing to initiate ashareholder derivative action before the federal courts of the United States. 16 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable toU.S. domestic public companies. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in theUnited States that are applicable to U.S. domestic issuers, including: ·the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; ·the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under theExchange Act; ·the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders whoprofit from trades made in a short period of time; and ·the selective disclosure rules by issuers of material nonpublic information under Regulation FD. We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on aquarterly basis as press releases, distributed pursuant to the rules and regulations of Nasdaq. Press releases relating to financial results and material events willalso be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timelycompared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information thatwould be made available to you were you investing in a U.S. domestic issuer. As a Cayman Islands company, we are permitted to adopt certain home country practices in relation to corporate governance matters that differsignificantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy underNasdaq corporate governance listing standards. As a Cayman Islands company listed on Nasdaq, we are subject to Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreignprivate issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, whichis our home country, may differ significantly from Nasdaq corporate governance listing standards. For example, neither the Companies Law nor ourmemorandum and articles of association requires a majority of our directors to be independent and we could include non-independent directors as membersof our compensation committee and nominating committee, and our independent directors would not necessarily hold regularly scheduled meetings at whichonly independent directors are present. Except as disclosed in “Item 16G. Corporate Governance”, we have not taken any exemption from the Nasdaqcorporate governance rules to follow our home country practices. However, if we choose to follow any home country practice in the future, our shareholdersmay be afforded less protection than they otherwise would under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. ITEM 4. INFORMATION ON THE COMPANY A.History and Development of the Company Our legal name is China Biologic Products Holdings, Inc. and our commercial name is Taibang Biologic. Our principal executive offices are located at 18thFloor, Jialong International Building, 19 Chaoyang Park Road, Chaoyang District, Beijing 100125, People’s Republic of China. Our corporate telephonenumber is (8610) 6598-3111 and our fax number is (8610) 6598-3222. Our agent for service of process in the United States is Cogency Global Inc. Wemaintain a website at http://www.chinabiologic.com that contains information about our Company, but that information is not part of this report orincorporated by reference herein. Our Company was originally incorporated on December 20, 1989 under the laws of the State of Texas as Shepherd Food Equipment, Inc. On November 20,2000, Shepherd Food Equipment, Inc. changed its corporate name to Shepherd Food Equipment, Inc. Acquisition Corp., or Shepherd. Shepherd is thesurvivor of a May 28, 2003 merger between Shepherd and GRC Holdings, Inc., or GRC, a Texas corporation. In the merger, the surviving corporation adoptedthe articles of incorporation and bylaws of GRC and changed its corporate name to GRC Holdings, Inc. On January 10, 2007, a plan of conversion becameeffective pursuant to which GRC was converted into a Delaware corporation and changed its name to China Biologic Products, Inc. On July 19, 2006, we completed a reverse acquisition with Logic Express Ltd., or Logic Express, a British Virgin Islands company, as a result of which LogicExpress became our wholly owned subsidiary, the former shareholders of Logic Express became our then controlling shareholders, and Logic Express’majority owned PRC subsidiary, Shandong Taibang, became our majority owned indirect subsidiary, which marked the commencement of our plasmaproducts business. In April 2009, we acquired 90% equity interest in Guiyang Dalin Biologic Technologies Co., Ltd., or Dalin, a then shareholder holding 54% equity interestin Guizhou Taibang. In January 2011, we acquired the remaining 10% equity interest in Dalin. From August 2014 to April 2016, we gradually increased ourshareholding in Guizhou Taibang to 85.27% through a series of acquisition of minority interests or capital injections. On November 8, 2016, two formerminority shareholders withdrew their respective capital contributions in Guizhou Taibang, and as a result, Guizhou Taibang became our indirect whollyowned subsidiary. China Biologic Products Holdings, Inc. was incorporated by China Biologic Products, Inc. as an exempted company in the Cayman Island on April 24, 2017.On July 21, 2017, China Biologic Products, Inc. completed its redomiciliation to the Cayman Islands by merging with and into China Biologic ProductsHoldings, Inc., with China Biologic Products Holdings, Inc. as the surviving company. On January 1, 2018, we acquired 80% equity interest in TianXinFu, a medical device company primarily engaging in the manufacturing and sale ofregenerative medical biomaterial products, from PW Medtech Group Limited (“PWM”). 17 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The common stock of China Biologic Products, Inc. was initially quoted on the over-the-counter market maintained by Pink Sheets LLC. On February 29,2008, the common stock of China Biologic Products, Inc. was approved for quotation on the Over-The-Counter Bulletin Board under the trading symbol“CBPO.OB.” On November 25, 2009, the common stock of China Biologic Products, Inc. was approved for listing on the Nasdaq Global Market under thesymbol “CBPO” and subsequently approved for listing on the Nasdaq Global Select Market on December 7, 2010. Upon the completion of the redomicilemerger on July 21, 2017, the common stock of China Biologic Products, Inc. was converted into ordinary shares of China Biologic Products Holdings, Inc.,which continued to be listed on the Nasdaq Global Select Market under the symbol “CBPO” effective July 24, 2017. Recent Developments On January 1, 2018, we acquired 80% equity interest in TianXinFu from PWM, in exchange for the issuance of 5,521,000 ordinary shares to PWM.TianXinFu is a medical device company primarily engaging in the manufacturing and sale of regenerative medical biomaterial products, including artificialdura mater and spinal dura mater products. Its pipeline products mainly include absorbable oral repair membrane for oral and maxillofacial surgery and thesecond generation artificial dura mater. TianXinFu has an extensive nationwide distribution network with distributors covering the major provinces in China,which we plan to leverage to maximize growth opportunities for our plasma products. In February 2018, we received the GMP certificate for our new facility in Shandong province and commenced operation. In February 2018, Guizhou Taibang received approval from the Health Commission of Hainan Province to build a new plasma collection station in HainanProvince. In March 2018, we received the operating permit for and commenced operations at our new plasma collection station in Daming County in Hebei Province. In July 2018, Shandong Taibang received the regulatory approval to build a new plasma collection station in Linqu County of Shandong Province. In July 2018, we received the operating permit for and commenced operations at our new branch collection facility in Feicheng County, which operatesunder our Ningyang plasma collection station in Shandong Province. In November 2018, Guizhou Taibang obtained the approval for clinical trial of its new generation IVIG. In December 2018, Guizhou Taibang obtained the land use right of 206 acres in the same city of its existing manufacturing facility in Guizhou Province andplanned to construct a new manufacturing facility to replace its old facility in Guizhou Province. We expect to launch this new facility by the end of 2022. In January 2019, Guizhou Taibang obtained the renewed GMP certificates for both of its plasma production facility and its placenta polypeptide productionfacility. On February 20, 2019, the Company entered into an amendment No. 1 to its amended and restated preferred shares rights agreement, dated as of July 31,2017, between the Company and Securities Transfer Corporation, as rights agent, to extend the expiration date of the rights contained therein from February22, 2019 to February 22, 2021. See “Item 10.B. Additional Information—Memorandum and Articles of Association—Preferred Shares Rights Plan” for furtherdetails. B.Business Overview We are a biopharmaceutical company principally engaged in the research, development, manufacturing and sales of human plasma-based biopharmaceuticalproducts, or plasma products, in China. We are among the top five producers of plasma products in China in terms of 2018 sales, based on our industryknowledge. We operate our plasma business through a majority owned subsidiary, Shandong Taibang, a company based in Tai’an, Shandong Province, and awholly owned subsidiary, Guizhou Taibang, a company based in Guiyang, Guizhou Province. We also hold a minority equity interest in Huitian, a plasmaproducts company based in Xi’an, Shaanxi Province. We have a strong biopharmaceutical product portfolio covering over 20 different dosage forms of plasma products across nine categories and one chemicaldrug, placenta polypeptide. All of our plasma products and the placenta polypeptide product are prescription medicines administered in the form ofinjections. Our principal products are human albumin and immunoglobulin for intravenous injection, or IVIG. Albumin has been used for almost 50 years totreat critically ill patients by assisting the maintenance of adequate blood volume and pressure. IVIG is used for certain disease prevention and treatment byenhancing specific immunity. These products use human plasma as their principal raw material. Sales of human albumin products represented approximately32.0%, 35.8% and 39.2% of our total sales for 2018, 2017 and 2016, respectively. Sales of IVIG products represented approximately 24.3%, 31.7% and34.6% of our total sales for 2018, 2017 and 2016, respectively. Our sales model for plasma products focuses on direct sales to hospitals and inoculationcenters and is complemented by distributor sales. On January 1, 2018, we acquired 80% equity interest in TianXinFu, a medical device company primarily engaging in manufacturing and sale of regenerativemedical biomaterial products, including artificial dura mater and spinal dura mater products. Its pipeline products mainly include absorbable oral repairmembrane for oral and maxillofacial surgery and the second generation artificial dura mater. We started reporting our financial results in segments along products lines since our acquisition of TianXinFu in 2018 and classified our reportable operatingsegments into (i) biopharmaceutical products and (ii) biomaterial products. Biopharmaceutical products currently include plasma products and placentapolypeptide. We do not account for the results of our operations on a geographic or other basis. 18 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PLASMA INDUSTRY Overview We operate primarily in the plasma industry in China. We derive certain industry-related data from reports and written analysis prepared by The MarketingResearch Bureau, Inc., or MRB, an independent research firm focused on blood and plasma industry data on a global level, including a China-specific reportfrom January 2017. China is the second largest plasma products market in the world, after the United States. According to MRB, China’s plasma products market (excludingrecombinant products) grew from $0.80 billion in 2009 to $2.47 billion in 2015 in terms of sales revenue, representing a compound annual growth rate, orCAGR, of 20.7%. MRB had expected that by 2018, China’s plasma-derived products market will reach over $3.3 billion, representing about a 35% increasefrom 2015, assuming domestic plasma supply continues to grow at least 8% annually. Based on our industry knowledge, human albumin products dominatedChina’s plasma products market with a market share of 64.4% in terms of production value in 2018, and IVIG products accounted for 21.7% of the market.Other plasma products, including coagulation factors, accounted for the remaining 13.9% of the market in 2018. Compared to more developed countries, China has a lower per capita usage level of plasma products, and China’s plasma products market is significantlydifferent in terms of product composition and range. In more developed countries such as the United States, IVIG products account for a majority of plasmaproduct sales. This difference reflects the maturity levels of the plasma industries in these countries. According to MRB, plasma fractionation came intoexistence in the United States in the 1940s, whereas in China, plasma processing appeared in the 1960s or 1970s. Until the early 1970s, the U.S. plasmaproducts market was dominated by albumin products, as is the case in China’s market presently. The current low per capita consumption of IVIG products inChina is primarily attributable to a lack of awareness of the benefits of IVIG therapy, especially in medical conditions such as primary immune deficiency orchronic inflammatory demyelinating polyneuropathy, and lower per capita healthcare spending in China. China’s plasma products market is expected to beincreasingly driven by IVIG products in the future as IVIG therapy becomes more widespread as a result of the combined efforts of physician education andproduct promotion, among other factors. Based on our industry knowledge, China National Biotec Group, or CNBG, China Biologic, Hualan Biological Engineering Inc., or Hualan, Shanghai RAASBlood Products Co., Ltd., or RAAS, and Sichuan Yuanda Shuyang Pharmaceutical Co., Ltd., or Shuyang, were the top five plasma product manufacturers interms of sales revenue in 2018. Overall Plasma Products Market Trends Compared to more developed countries, China’s plasma products market has distinctive characteristics and trends, including the following: High Entry Barriers. The PRC State Council has ceased issuing new plasma fractionation licenses since 2001, and there are approximately 30 licensedproducers of plasma products in China, of which only approximately 27 are currently in operation. Nearly all of these producers make albumin and IVIGproducts, but only four operate with the product portfolio comprising at least nine categories of plasma products. Furthermore, foreign investment indomestic producers of plasma products is subject to stringent government approval process. As a result, existing China-based producers with large productioncapacities face limited competition and are well positioned to gain more market share during the industry consolidation phase. Stringent regulation. China’s plasma products market is stringently regulated. Because of the public health crises of contaminated plasma productsexperienced by China over the past decade, China has implemented, and is expected to continue to maintain, stringent regulations for the plasma productsindustry in the foreseeable future. The opening of a new plasma collection station in China requires the approval by three levels of government authorities,namely the provincial, municipal and county level authorities, which is a time-consuming and difficult process. To be eligible to open a new collectionstation, a company must produce no fewer than six types of plasma products, which must include products in three mandatory categories, namely humanalbumin, immunoglobulin and coagulation factors. From 2010 to 2015, various local governments approved the opening of plasma collection stations bysmall companies that were not able to produce all the mandatory products. In response, in December 2016, the NHC and NMPA jointly released a newguideline on the regulation of plasma collection stations. The guideline aims to strengthen regulatory oversight for existing collection stations and approvalrequirements for new plasma collection stations, and to tighten safety control at the plasma collection stations to improve the quality of plasma collected.The guideline states that in considering the applications for the opening of new plasma collection stations, the relevant authorities should give priority tocompanies with strong research and development capabilities, high plasma utilization rate and good management practice. We believe this guideline willbenefit large plasma products manufacturers like China Biologic by reducing the chance for smaller manufacturers to open new plasma collection stations. Demand outstripping supply. Due to stringent regulations on the collection of raw plasma from human beings and a lack of plasma donation, China hasexperienced a shortage of plasma products since the 1980s. There are close to 260 plasma collection centers in China, compared to over 550 in the UnitedStates. The restriction on approving new collection centers in China, cultural barriers to plasma donation, concerns over plasma donation safety, and lowquantity per donation and long intervals between donations contribute to the supply shortage. According to the NHC, the demand for raw plasma materials inChina is estimated to be over 10,000 tons per annum. Total plasma collected in 2016 was approximately 7,200 tonnes in China, in comparison withapproximately 38,000 tonnes in the United States. As a result, the tendering prices for plasma products by various provincial and regional governments havebeen slightly increased or stabilized in contrast to price cuts for other drugs. Ban on imports. As a measure to prevent a range of viral risks, China strictly prohibits the import of plasma products, except for human albumin andrecombinant factor VIII products. In other market segments, such as IVIG, where import is prohibited, domestic producers are shielded from competition fromtheir multinational peers, and the demand for such products in China has been supplied entirely by domestically-sourced plasma only. Low consumption level and huge growth potential. While China’s plasma products market has experienced rapid growth in recent years, China’s per capitaconsumption of plasma products lags substantially behind more developed countries. The following chart sets forth the comparison of per capitaconsumptions of selected plasma products in China and the United States in 2015: 19 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: MRB(1)Based on 2015 per capita consumption (kilogram per million inhabitants) in the Unites States divided by 2015 per capita consumption in China.(2)Based on 2015 per capita consumption (international units per capita) in the Unites States divided by 2015 per capita consumption in China. Based on our industry knowledge, as a result of the growing number of patients seeking treatment of plasma products, an increasing awareness of healthbenefits of plasma products and the rising affordability of plasma products since the commencement of China’s healthcare reform, China’s plasma productsmarket is expected to continue to have substantial growth potential. Improved fractionation technologies. In the early years of plasma fractionation in China, technologies used were not as sophisticated as those in the UnitedStates, resulting in relatively low yields and a product portfolio limited to only two or three products (albumin, IVIG and hyper-immune globulin products).Technologies used by and yields from leading domestic manufacturers are, however, on par with international standards, and these manufacturers are wellpositioned to manufacture safer products and have higher production efficiency compared with other domestic companies. Increasing market concentration of top players. China’s current landscape of plasma products market is relatively fragmented. However, factors such asstringent regulations, tightened quality control and heavy capital expenditure requirements have contributed to increasing industry consolidation in recentyears. For instance, the NMPA issued new GMP requirements to re-certify all the fractionation plants by the end of 2013, which has resulted in the shutdownof smaller fractionation plants that were unable to upgrade their production lines by the deadline. China’s plasma industry has also witnessed multiple mergerand acquisition transactions in recent years. Market leaders with stable plasma supplies complemented by further collection expansion potentials, strongproduct portfolios and robust research and development capabilities are expected to be able to continue to solidify their positions and further gaindevelopment advantages. BUSINESS Our Competitive Strengths We believe that the following competitive strengths enable us to compete effectively in and capitalize on the growth of the plasma products, the placentapolypeptide and the biomaterial products markets: Leading producer of plasma products in China with strong growth potential We are one of the top five producers of plasma products in terms of 2018 sales revenue based on our industry knowledge. In the albumin segment, whichaccounts for a majority of the plasma products market in China, we are the second largest domestic producer with a market share of approximately 5.8% interms of 2018 production volume, based on our industry knowledge. In the IVIG segment, which is the second largest segment of the plasma products marketin China, we are also the second largest producer overall in China with a market share of approximately 13.2% in terms of 2018 production volume, based onour industry knowledge. We have a strong product portfolio covering over 20 different dosage forms of plasma products across nine categories and a robust near-term product pipelineof five products. We believe that we are one of the only four plasma products manufacturers in China with the product portfolio comprising at least ninecategories of plasma products. Since different types of plasma products utilize different protein components of plasma, different types of plasma products canbe produced from the same raw plasma supply with minimal incremental increase in raw material cost. Our broad product portfolio, supported by our strongresearch and development capabilities, therefore, provides us with the benefit of more comprehensive plasma utilization, which in turn contributes to higherprofit margins. 20 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We believe that product safety and supply stability are the most critical considerations for hospitals and inoculation centers in making purchase decisions onplasma products. We implement stringent quality control measures throughout our production process, and have not historically experienced failure toreceive pre-sale approval or had a recall with respect to any of our plasma products. Our new manufacturing facility in Shandong Province and themanufacturing facility in Guizhou Province together have a production capacity of 1,600 tonnes. As a leading producer of plasma products, we have beenable to maintain a steady plasma supply volume and sales volume over the years. Our safety record and the stability of our supply, we believe, havestrengthened our business relationship with existing customers and enhanced our ability to acquire new customers. China’s plasma products market is, and will continue to be, subject to stringent government regulation. In recent years, however, PRC regulators have alsotaken initiatives to increase plasma collection volume by approving more new plasma collection stations and expanding plasma collection coverage forexisting plasma collection stations. We are well positioned to benefit from these favorable regulatory trends as we are able to meet the associated qualitycontrol and technology investment requirements. Stable and growing supply of plasma with strategically located collection stations Our ability to secure and expand our supply of plasma, a critical raw material for our operations, is one of our key strengths. Our plasma collection networkconsists of 17 captive plasma collection stations (including two branch collection facilities). In addition, Huitian, a company in which we hold a minorityequity interest, operates three plasma collection stations. In 2018, we were among the top five plasma collectors in China in terms of collection volume withapproximately 11.6% of the total national supply, based on our industry knowledge. We operate eleven plasma collection stations (including two branch collection facilities) in Shandong Province, two in Guangxi Province, two in GuizhouProvince, and two in Hebei Province, covering an aggregate population of approximately 47.7 million. Shandong Province has one of the largestpopulations, and Guangxi Province and Guizhou Province are among the least economically developed regions in China — both favorable characteristicsunderpinning a strong and stable plasma supply. Hebei Province is an underdeveloped province for plasma collection that provides convenient andeconomic transportation to our manufacturing facilities in adjacent Shandong Province. We continue to seek innovative ways to identify and attract potential plasma donors. We regularly organize a variety of community events to deliver ourmessages that focus on the life-saving and other social contribution aspects of plasma donation. We also regularly review our donor compensation to ensurethat it remains competitive. In addition, we actively seek to expand the geographic coverage of our existing collection stations to gain access to additionaldonor populations. As a result of our collection efforts, our average plasma collection volume is greater than the national average by approximately 77.2% in2018 based on our industry knowledge. Our total plasma collection volume increased by approximately 8.0% from 2017 to 2018. In addition to increasing our collection volume at existing plasma collection stations, we also seek to build new plasma collection stations to expand ourdonor base. For example, in March 2018, we received the operating permit for and commenced operations at our new plasma collection station in DamingCounty in Hebei Province. In July 2018, we received the operating permit for and commenced operations at our new branch collection facility in FeichengCounty, which operates under our Ningyang plasma collection station in Shandong Province. In February 2018, we received the regulatory approval to builda new plasma collection station in Wenchang City of Hainan Province. In July 2018, we received the regulatory approval to build a new plasma collectionstation in Linqu County of Shandong Province. Robust near-term product pipeline to capture full plasma value chain backed by strong research and development capabilities We currently have five new plasma products under development, with one of them in registration stage and expected to be commercially launched by the firsthalf of 2019. We expect our expanding product portfolio to further increase our comprehensive plasma utilization, which will in turn lead to higher profitmargins. With our current and pipeline products, we believe that our product offerings will be able to capture substantially all of the value along the plasmaproducts value chain. Benefiting, in part, from our direct sales to hospitals and inoculation centers, our ability to bring new products to market reflects a research and developmentprocess that is demand-driven and highly responsive to physician feedback and the latest market trends in medicine. To complement our research anddevelopment efforts, we also work closely with a number of leading research institutes in China specializing in plasma products. As of December 31, 2018,we held 70 patents for plasma products. Leading position in China’s fast-growing immunoglobulin products market We were among the top three producers of immunoglobulin products in China in 2018 in terms of production value, and ranked the second for IVIG and thethird for human tetanus immunoglobulin in China in 2018 in terms of production volume, based on our industry knowledge. Our total sales revenue ofimmunoglobulin products, accounting for approximately 37.0% of our total sales, increased to $173.0 million in 2018 from $97.0 million in 2013,representing a CAGR of 12.3% between 2013 and 2018. We attribute our rapid growth and leading position in the immunoglobulin products market, in part,to our continued marketing efforts to promote these products, especially the promotion of IVIG therapy to physicians in tier-one cities and large regionalhospitals. According to MRB, China’s IVIG products achieved sales revenue of $671.0 million in 2015, representing a CAGR of approximately 14.5% from 2009. Thesubstantial growth in China’s IVIG products market in recent years was mainly due to increasing awareness by doctors of the benefits of IVIG therapy. In moredeveloped countries, major applications of IVIG therapy are for chronic diseases such as primary immune deficiency and chronic inflammatorydemyelinating polyneuropathy, which require treatment for a number of years or even lifetime. In contrast, IVIG therapy is only used to treat acute diseasesand infections in China. Compared with markets in more developed countries, China’s IVIG products market is far from mature. The per capita consumptionof IVIG products in China is significantly lower than that in the more developed countries. In 2015, for instance, the per capita consumption of IVIG productsin China was 15.0 grams per 1,000 inhabitants, as compared to over 200 grams per 1,000 inhabitants in the United States, according to MRB. Therefore, thereis tremendous growth potential as China’s IVIG consumption draws closer to that of the more developed countries as a result of growing awareness of IVIGtherapy and favorable government reimbursement policies. Developing this market requires significant efforts from IVIG manufacturers to educatephysicians, the public and the health authorities on the benefits of IVIG therapy for a number of medical conditions. As a leading player with own marketingand promotion team in China’s IVIG products market, we are uniquely positioned to benefit from the anticipated increase in demand from the popularizationof IVIG therapy. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 21 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Leading producer of dura mater products in China with strong growth potential TianXinFu, the company we acquired in January 2018, is a medical device company primarily engaged in the manufacturing and sale of regenerative medicalbiomaterial products. Its core product, artificial dura mater, accounting for 90.9% of its sales in 2018, is widely used in neurosurgeries. Based on our industryknowledge, TianXinFu is the largest dura mater manufacturer in China with a market share of approximately 35% in terms of 2016 sales for both domesticallyproduced and import products. In addition, TianXinFu also has several products in its pipeline to help ensure future sustainable growth. In January 2019, TianXinFu obtained the approvalfor manufacturing of a new product, brain tissue retractor, which is also used in neurosurgeries, and it aims to launch the first batch of this product to themarket in the first half of 2019. TianXinFu has also completed the clinical trial research of two additional products and expects to obtain the manufacturingapproval in late 2019 or early 2020. Several other products are also under clinical trial or are preparing for clinical trial. As these products launch in thefuture, TianXinFu will further improve its position in the tissue repair market. Flexible and effective sales and distribution model aimed to maximize penetration We have a flexible sales model for plasma products that focuses on direct sales to hospitals and inoculation centers and is complemented by distributor sales.Under this sales model, our products reach 31 provinces, municipalities and autonomous regions in China. For medical device products, TianXinFu also hasan extensive sales and marketing network covering over 1,600 Chinese hospitals in approximately 30 provinces in China. With the integration of TianXinFu,we expect to benefit from TianXinFu’s extensive nationwide sales networks and professional marketing expertise to further improve the distribution of ourplasma products. In 2018, 50.6% of our plasma product sales were generated from direct sales, and in 2018, our direct sales network covered approximately 763 hospitals andinoculation centers. Our sales and marketing team, consisting of 245 employees as of December 31, 2018, is responsible for the sales and marketing efforts toour end customers and provide product educational programs and other sales support directly to doctors and nurses. These efforts are designed to ensureeffective and seamless communications with our end customers, particularly with respect to clinical education, which provides us with first-hand intelligenceon the latest industry trends and market demands and enables us to provide better after-sale services and support. For example, our sales and marketing teamactively promotes new IVIG indications that are widely accepted in more developed countries but less known among Chinese physicians. Our direct sales network is complemented by sales through distributors, which accounted for 49.4% of our plasma product sales in 2018. We select ourdistributors through a rigorous process, which focuses on market leadership in the covered region, the degree of control we have over to which hospitals ourproducts are sold (i.e., larger and higher tiered hospitals are preferred), and the level of access we have to our customers (i.e., greater access enables us to bettertrack the sales of our products). We believe that our flexible sales model of focusing on direct sales is cost-effective and has helped us to achieve strong financial performance. Our sellingexpenses as a percentage of sales were 20.5%, 9.4% and 3.4% in 2018, 2017 and 2016, respectively; and our operating margin was 31.3%, 36.7% and 42.1%during these periods, respectively. Experienced and committed management team We have an experienced, dedicated and visionary management team with an in-depth understanding of the pharmaceutical industry in China. Our ChiefExecutive Officer, Dr. Bing Li, has extensive experience in the pharmaceutical industry across multinational and domestic companies, and is instrumental inthe development and implementation of our business strategy. Our Chief Financial Officer, Ming Yang, has more than 20 years of financial management andaccounting experience. Mr. Guangli Pang and Mr. Gang Yang, the general manager of Shandong Taibang and Guizhou Taibang, respectively, have morethan 30 and 20 years of experience in the plasma products industry in China, respectively. TianXinFu’s management team also has many years of experiencein their industry. With our reformed senior management team that was put in place in 2018, we have been committed to improving corporate governance andenhancing shareholder value. We believe our management team, with their extensive industry background and strong management talent, provides a strongfoundation for the execution of our growth strategy and achievement of our goals. Our Business Strategy Our mission is to build a world-class biopharmaceutical and biotechnology company, with a leading position in key therapeutic areas. To achieve thisobjective, we have implemented a business strategy with the following key components: Securing the supply of plasma To secure the supply of plasma, we plan to build new plasma collection stations in regions not covered by our existing collection network as well as toexpand collection territories of existing plasma collection stations. We currently have a total of 17 plasma collection stations (including two branchcollection facilities) in operation, of which eleven are in Shandong Province, two in Guangxi Province, two in Guizhou Province and two in Hebei Province.In March 2018, we received the operating permit for and commenced operations at our new plasma collection station in Daming County in Hebei Province.In July 2018, we received the operating permit for and commenced operations at our new branch collection facility in Feicheng County, which operatesunder our Ningyang plasma collection station in Shandong Province. In February 2018, we received the regulatory approval to build a new plasma collectionstation in Wenchang City of Hainan Province. In July 2018, we received the regulatory approval to build a new plasma collection station in Linqu County ofShandong Province. Meanwhile, we are carrying out various promotional activities to stabilize and expand our donor base for our existing plasma collectionstations. Further strengthening of research and development capability We believe that, unlike other more developed countries such as the United States, China’s plasma products are at an early stage of development. There aremany other plasma products that are being used in the United States, which are not currently manufactured or used widely in China. We intend to strengthenour research and development capabilities through in-house development and partnership with leading international players to expand our product line toinclude plasma products that have higher margins and are technologically more advanced. We also intend to continue to improve the yield for our products.As a result of our research and development efforts, we currently have five new plasma products under development, with one of them in registration stageSource: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.and expected to be commercially launched in the first half of 2019. TianXinFu also has several products in its pipeline to help ensure the sustainable growthin the future. For further details of our pipeline products, see “Item 4.B. Information on the Company—Business Overview—Business—Our Research andDevelopment Efforts” below. We believe that our increased focus on research and development will give us a competitive advantage in China over ourcompetitors. 22 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Market development and network expansion We intend to further strengthen our terminal promotion capabilities and boost demand for our products through medical education targeted at end users. Inparticular, we plan to make promotional efforts by educating doctors and patients in our hospital partner, with a focus on IVIG and new products such as PCCand Fibrinogen, of which we continue to see a significant gap in usage between China and Western countries. In parallel, we will select new high-potentialhospitals and get our products listed in those hospitals effectively. We also plan to identify and establish strong partnerships with reliable distributors tosupplement our direct sales efforts and support market access. In addition, we are exploring partnerships with various retail pharmacy chains which weconsider as an alternative channel to hospital sales. Organic growth complemented by acquisition of competitors and/or other new biopharmaceutical and medical device products We have expanded organically by securing sufficient plasma supply and strengthening in-house development efforts. In addition to organic growth,acquisition is an important part of our expansion strategy. Although there are approximately 30 approved plasma-based biopharmaceutical manufacturers inthe market, we believe that there are approximately 27 manufactures currently in operation in China, only about half of which are competitive. We estimatethat the top five manufacturers in China accounted for approximately 70% market share (excluding imports) in terms of sales revenue in 2018. We believethat the regulatory authorities are considering further industry reform and those smaller, less competitive manufacturers will face possible revocation of theirmanufacturing permits by the regulators due to the compliance cost, making them potential targets for acquisition. If we are presented with appropriateopportunities, we may acquire additional companies in the plasma sectors. Furthermore, we plan to add new biopharmaceutical and medical device products to our portfolio, and potentially acquire stronger operational capabilities incommercial activities, research and development and manufacturing. We also plan to expand our industry leadership position to markets outside of China, bytransitioning from plasma products to other related therapeutic areas and medical devices, which will help us evolve into a world-class leadingbiopharmaceutical and biotech company. Potential targets for mergers and acquisitions may bring us products and technology in strategic therapeutic areas.In addition, they may also bring us highly valuable operational capabilities in different areas. Our Products Our principal plasma products are our approved human albumin and IVIG products. Human albumin is principally used to treat critically ill patients byreplacing lost fluid and maintaining adequate blood volume and pressure. IVIG products are primarily used to enhance specific immunity, a defensemechanism by which the human body generates certain immunoglobulin, or antibodies, against invasion by potentially dangerous substances. In a situationwhere the human body cannot effectively react to these foreign substances, injection of IVIG products can provide sufficient antibodies to neutralize suchsubstances. We also have one chemical drug, placenta polypeptide. In addition, on January 1, 2018, we acquired 80% equity interest in TianXinFu, a medicaldevice company primarily engaging in manufacturing and sale of regenerative medical biomaterial products. All of the plasma products and the maincategory of other products that we are currently approved to produce are listed in the table below. All of our approved plasma products and the placentapolypeptide products are prescription medicines administered in the form of injections. Approved Products(1)(2) Treatment/UseHuman albumin – 20%/10ml, 20%/25ml, 20%/50ml, 10%/100ml,10%/20ml, 10%/50ml, 25%/50ml and 20%/50ml (10g, from factor IV) Shock caused by blood loss trauma or burn; raised intracranial pressure causedby hydrocephalus or trauma; oedema or ascites caused by hepatocirrhosis andnephropathy; prevention and treatment of low-density-lipoproteinemia; andneonatal hyperbilirubinemia. Human immunoglobulin – 10%/3ml and 10%/1.5ml Original immunoglobulin deficiency, such as X chain low immunoglobulin,familiar variable immune deficiency, immunoglobulin G secondary deficiency;secondary immunoglobulin deficiency, such as severe infection, newbornsepsis; and auto-immune deficiency diseases, such as originalthrombocytopenia purpura or Kawasaki disease. IVIG – 5%/25ml, 5%/50ml, 5%/100ml and 5%/200ml Same as above. Human hepatitis B immunoglobulin – 100 IU, 200IU and 400IU Prevention of measles and contagious hepatitis. When applied together withantibiotics, its curative effect on certain severe bacteria or virus infection maybe improved. Human rabies immunoglobulin – 100IU, 200IU and 500IU Mainly for passive immunity from bites or claws by rabies or other infectedanimals. All patients suspected of being exposed to rabies are treated with acombined dose of rabies vaccine and human rabies immunoglobulin. Human tetanus immunoglobulin – 250IU Mainly used for the prevention and therapy of tetanus. Particularly applied topatients who have allergic reactions to tetanus antitoxin. (3) Placenta polypeptide – 4ml/vial Treatment for cell immunity deficiency diseases, viral infection and leucopeniacaused by various reasons, and assist in postoperative healing. Factor VIII – 200IU and 300IU Treatment for coagulopathies such as hemophilia A and increased concentrationof coagulation factor VIII. Human prothrombin complex concentrate (or PCC) – 300IU Treatment for congenital and acquired clotting factor II, VII, IX, X deficiency,such as Hemophilia B, excessive anticoagulant, and vitamin K deficiency, etc. Human fibrinogen – 0.5g Treatment for lack of fibrinogen and increase human fibrinogen concentration. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Artificial dura mater Dura substitutes are used when the patients’ dura cannot be suturedsatisfactorily and watertight closure is difficult to achieve. 23 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (1)“%” represents the degree of dosage concentration for the product and each product has its own dosage requirement. For example, human albumin20%/10ml means 2g of human albumin is contained in each 10ml packaging and human immunoglobulin 10%/3ml means 300mg of humanimmunoglobulin is contained in each 3ml packaging. Under PRC law, each variation in the packaging, dosage and concentration of medical productsrequires separate registration and approval by NMPA before it may be commercially available for sale. For example, among our human albumin products,only human albumin 20%/10ml, 20%/25ml, 20%/50ml, 10%/100ml, 10%/20ml, 10%/50ml, 25%/50ml and 20%/50ml (10g, from factor IV) products arecurrently approved and are commercially available. (2)“IU” means International Units. IU is a unit used to measure the activity of many vitamins, hormones, enzymes, and drugs. An IU is the amount of asubstance that has a certain biological effect. For each substance there is an international agreement on the biological effect that is expected for 1 IU. Inthe case of immunoglobulin, it means the number of effective units of antibodies in each package. (3)Tetanus antitoxin is a cheaper injection treatment for tetanus. However, it is not widely used because most people are allergic to it. Raw Materials Plasma from in-house collection Plasma is the principal raw material for our biopharmaceutical products. We currently operate 15 plasma collection stations (including two branch collectionfacilities) through Shandong Taibang and two plasma collection stations through Guizhou Taibang. We plan to build new plasma collection stationsthroughout China as well as to expand collection territories of existing plasma collection stations. In March 2018, we received the operating permit for andcommenced operations at our new plasma collection station in Daming County. In July 2018, we received the operating permit for and commencedoperations at our new branch collection facility in Feicheng County. In February 2018, we received the regulatory approval to build a new plasma collectionstation in Wenchang City of Hainan Province. In July 2018, we received the regulatory approval to build a new plasma collection station in Linqu County ofShandong Province. We believe that our plasma collection stations give us a stable source of plasma supply and control over product quality. Also, webelieve that we have enjoyed benefits of economies of scale, including sharing certain administration and management expenses across our several plasmacollection stations. Plasma sourced from Xinjiang Deyuan We entered into a cooperation agreement with Xinjiang Deyuan and its controlling shareholder in August 2015, supplemented by a supplementaryagreement entered into in August 2018. Under these agreements, Xinjiang Deyuan had sold us more than 500 tonnes of source plasma in batches from August2015 to August 2018 and agreed to sell to us no less than 500 tonnes of source plasma over a three year period from August 2018 to August 2021. As ofDecember 31, 2018, an aggregate of 652 tonnes of plasma had been delivered to us under these agreements. Our transactions with Xinjiang Deyuan provideus with a significant volume of additional raw material over the contracted period and enable us to efficiently enhance our production capacity utilizationand supply more plasma products to satisfy growing market demand. As required and approved by the local regulator, all plasma used for production must beable to be traced to plasma collection stations, and therefore, we monitor the quality of the plasma collection process at Xinjiang Deyuan. Other raw materials and packaging materials Other raw materials used in the production of our biopharmaceutical products include reagents and consumables such as filters and alcohol. The principalpackaging materials we use include glass bottles for our injection products as well as external packaging and printed instructions for our biopharmaceuticalproducts. The TianXinFu business that we acquired in January 2018 uses extracted collagen as the main raw material to produce the regenerative medicalbiomaterial products. We acquire our raw materials and packaging materials from our approved suppliers in China and overseas. We select our suppliersbased on quality, consistency, price and delivery of the raw materials which they supply. Our five largest suppliers for other raw materials and packaging materials in the aggregate accounted for approximately 34.2%, 32.8% and 42.5% of our totalprocurement for the years ended December 31, 2018, 2017 and 2016, respectively. We have not experienced any shortage of supply or significant qualityissue with respect to any raw materials and packaging materials. Plasma Collection Our plasma collection stations purchase, collect, examine and deepfreeze plasma on behalf of Shandong Taibang and Guizhou Taibang and are subject toprovincial health bureau’s rules, regulations and specifications for quality, packaging and storage. Each station is only allowed to collect plasma fromhealthy donors within its respective districts and in accordance with a time table set by its respective parent company, Shandong Taibang or GuizhouTaibang. The plasma must be tested negative for HBsAb, HCV and HIV antibodies and the RPR test, contain ALT 25 units (ALT) and plasma protein 55g/l,and contain no virus pollution or visible erythrolysis, lipemia, macroscopic red blood cell or any other irregular finding. The plasma is packaged in 25 to 30separate 600g bags in each box and then stored at a temperature of -20°C or lower within limited time after collection to ensure that it will congeal within sixhours. Each bag is labeled with a computer-generated tracking code. Shandong Taibang and Guizhou Taibang are responsible for the overall technical andquality supervision of the plasma collection, packaging and storage at each plasma collection station. 24 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Sales, Marketing and Distribution Because all of our biopharmaceutical products are prescription drugs and the medical device products are used in surgeries, we can only sell to hospitals andinoculation centers directly or through approved distributors. For 2018, 2017 and 2016, direct sales to hospitals and inoculation centers representedapproximately 50.6%, 60.7% and 61.1%, respectively, of our total plasma products sales and the other biopharmaceutical and medical device products aremostly sold through distributors. Our five largest customers, which are all plasma products customers, in the aggregate accounted for approximately 12.4%,16.8% and 15.5% of our total sales for 2018, 2017 and 2016, respectively. Our largest customer accounted for approximately 5.8%, 5.8% and 5.4% of ourtotal sales for 2018, 2017 and 2016, respectively. We select our distributors through a rigorous process, which focuses on market leadership in the covered region, the degree of control we have over to whichhospitals our products are sold (i.e. larger and higher tiered hospitals are preferred), and the level of access we have to our customers (i.e. greater accessenables us to better track the sales of our products). As part of our effort to ensure the quality of our distributors, we also conduct due diligence to verifywhether potential distributors have obtained necessary permits and licenses and facilities (such as cold storage) for the distribution of our products and assesstheir financial condition. Certain of our regional distributors are appointed on an exclusive basis within a specified geographic territory. Our supply contractsset out the quantity and price of products to be supplied by us. For distributors, our contracts also contain guidelines for the sale and distribution of ourproducts, including restrictions on the geographical territory in which the products may be sold. We provide our distributors with training in relation to ourproducts and on sales techniques. Our largest geographic market of biopharmaceutical products is Shandong Province, representing approximately 18.6%, 23.8% and 24.3% of our total salesfor 2018, 2017 and 2016, respectively. Jiangsu Province is our second largest geographic market of biopharmaceutical products, representing 11.0%, 10.0%and 10.0% of our total sales for 2018, 2017 and 2016, respectively. In addition to Shandong Province and Guizhou Province, we also have sales presence in29 other provinces, municipalities and autonomous regions. As of December 31, 2018, our marketing and after-sales services department consisted of 245 employees, including 65 employees of TianXinFu. We believe that due to the nature of our products, our competitiveness centers on product safety, steady supply, brand recognition, timely availability andpricing. As all of our biopharmaceutical products are prescription medicines and the medical device products are used in surgeries, we are not allowed toadvertise our products in the mass media. For 2018, 2017 and 2016, total sales and marketing expenses amounted to approximately $95.6 million, $34.8million and $11.7 million, respectively, representing approximately 20.5%, 9.4% and 3.4%, respectively, of our total sales. Seasonality of Our Sales Our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, as a result of newmarket opportunities or new product introductions. Our Research and Development Efforts Each of Shandong Taibang, Guizhou Taibang and TianXinFu has its own research and development department. All of our research and developmentresearchers hold degrees in medicine, pharmacy, biology, biochemistry or other relevant fields. Our research and development departments are responsible forthe development and registration of our products. We also cooperate with a number of leading institutions in China specializing in plasma products tostrengthen our research and development capacity. We employ a market driven approach to initiate research and development projects, including both product and production technique development. Webelieve that the key to our industry’s developments is the safety of products and maximizing the yield per unit volume of plasma. Our research anddevelopment efforts for plasma products are focused on the following areas: •broaden the breadth and depth of our portfolio of plasma products; •enhance the yield per unit volume of plasma through new fractionation techniques; •maximize manufacturing efficiency and safety; •promote product safety through implementation of new technologies; and •refine production technology for existing products. All the products we currently manufacture have been developed in-house. The following table outlines our research and development work forbiopharmaceutical products in progress: Products Currently in Development Treatment/Use Status of Product Development Stage*Immune Globulin Intravenous (Human),Caprylate/Chromatography Purified and 20 nmvirus filtration Treatment for original immunoglobulindeficiency; secondary immunoglobulindeficiency and auto-immune deficiencydiseases. Obtained approval for clinical trial by theNMPA. 3 Human Antithrombin III (concentration) Treatment for (1) hereditary antithrombin IIIdeficiency in connection with surgical orobstetrical procedures and (2)thromboembolism. Obtained approval for clinical trial by theNMPA. Commenced clinical trial program. 3 Human coagulation factor IX Prevention and control of bleeding in patientswho suffer from hemophilia B. Completed the clinical trial and preparingdocumentation for the registration purpose. 4Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Human Cytomegalovirus Immunoglobulin Prophylaxis and treatment of CMV infection,especially for the prevention of active virusreplication for patients in immunosuppression,such as organ transplantation patients. Obtained approval for clinical trial by theNMPA. In the process of collectingCytomegalovirus specialty plasma. 3 Human Fibrin Sealant Adjunct to hemostasis on patients undergoingsurgery in case that traditional surgicaltechniques (such as suture, ligature or cautery)are ineffective or impractical. Obtained approval for clinical trial by theNMPA. 3 *These stages refer to the stages in the regulatory approval process for our biopharmaceutical products described in “— Regulation.” 25 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TianXinFu also has its own research and development department. In January 2019, TianXinFu obtained the approval for manufacturing of a new product,brain tissue retractor, which is used in neurosurgeries, and it aims to launch the first batch of this product to the market in the first half of 2019. AmongTianXinFu’s pipeline products, the clinical trials of two products, 1) absorbable oral repair membrane for oral and maxillofacial surgery and 2) the secondgeneration artificial dura mater, have been completed and TianXinFu is preparing documentation for the registration purpose. The clinical trials of twoproducts, 1) bio-artificial membrane for repairing maxillofacial bone defect and 2) bio-artificial intraocular pressure maintenance membrane for ophthalmicsurgery, have commenced. TianXinFu is preparing for the clinical trial of another product, biological bone matrix. For 2018, 2017 and 2016, total research and development expenses amounted to approximately $9.5 million, $6.5 million and $7.0 million, respectively,representing approximately 2.0%, 1.7% and 2.1%, respectively, of our total sales. Competition We face intense competition. There are both local and overseas pharmaceutical enterprises that engage in the manufacture and sale of potential substitutes orsimilar biopharmaceutical and medical device products as our products in China. These competitors may have more capital, better research and developmentresources, and stronger manufacturing and marketing capabilities than we do. In our industry, we compete based upon product quality, production cost,ability to produce a diverse range of products and logistical capabilities. Our profitability may be adversely affected if competition intensifies, competitors reduce prices, regulators promulgate or strengthen regulations that havethe effect of controlling the prices of our products, or competitors develop new products or product substitutes with comparable medicinal applications ortherapeutic effects that are more effective or less costly than ours. There are approximately 30 approved manufacturers of plasma products in China of which approximately 27 are currently in operation. Many of thesemanufacturers are essentially producing the same type of products that we produce, including human albumin and various types of immunoglobulin. Webelieve, however, that it is difficult for new manufacturers to enter into the industry due to current regulatory barrier. We believe that our major competitors inChina include CNBG, Hualan, Shanghai RAAS Blood Products Co., Ltd., Sichuan Yuanda Shuyang Pharmaceutical Co., Ltd., and Boya Bio-PharmaceuticalGroup Co., Ltd. In addition, we also face competition from imported products where allowed. Since 2009, China has experienced a substantial increase in volume of importedhuman albumin. If the import of human albumin continues to increase, we may face more fierce competition in the domestic human albumin market. Based on our industry knowledge, we are among the top five plasma products manufacturer in China in terms of 2018 sales revenue. To solidify our marketposition, we have expanded our plasma product portfolio to nine categories, including three coagulation factor products, namely factor VIII, humanprothrombin complex concentrate, or PCC, and human fibrinogen. For factor VIII, we obtained the manufacturing approval certificate and the GMPcertification for production facility from the NMPA in 2012. For PCC, we obtained the manufacturing approval certificate in July 2013 and the GMPcertification for the production facility in March 2014. For human fibrinogen, we obtained the manufacturing approval certificate and the GMP certificationfor the production facility in October 2017. We believe that we are one of the only four plasma products manufacturers in China with the product portfoliocomprising at least nine categories of plasma products. We will continue to meet challenges and secure our market position by enhancing our existing products, introducing new products to meet customer demand,delivering quality products to our customers in a timely manner and maintaining our established industry reputation. Our Intellectual Property We held 87 issued patents and 30 pending patent applications in China for certain manufacturing processes and packing designs as of December 31, 2018.We also had 13 registered trademarks in China as of December 31, 2018. In addition, we had registered four domain names as of December 31, 2018, namely, www.chinabiologic.com, www.ctbb.com.cn, www.taibanggz.com andwww.txfmedical.com. Regulation Set forth below is a summary of the major PRC regulations relating to our business. Due to the nature of our products, we are supervised by various levels of the NHC and/or NMPA. Such supervision includes the safety standards regulatingour raw material supplies (mainly plasma), our manufacturing process and our finished products. We are also subject to other PRC regulations, including those relating to taxation, foreign currency exchange and dividend distributions. Plasma collection Plasma collection stations are commonly used to collect plasma in China and substantially all plasma donations for commercialized plasma products aremade at plasma collection stations. Plasma donation means that donors give only plasma but not the other blood components such as platelets, red cells andinfection-fighting white cells. In China, current regulations only allow an individual donor to donate plasma in 14-day intervals, with a maximum quantity of580ml (or about 600 gram) per donation. 26 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The following are the general regulatory requirements to establish a plasma collection station in China: •meet the overall plan in terms of the total number, distribution, and operational scale of plasma collection stations; •have the required professional health care technicians to operate a station; •have the facility and a hygienic environment to operate a station; •have an identification system to identify donors; •have the equipment to operate a station; •have the equipment and quality control technicians to ensure the quality of the plasma collected; and •conform to the provisions with regard to the national bio-safety administration. Plasma collection stations were historically owned and managed by the PRC health authorities. In March 2006, the NHC and other eight centralgovernmental departments of the PRC State Council promulgated the Measures for the Reform of Blood Collection Stations whereby the ownership andmanagement of the plasma collection stations are required to be transferred to plasma-based biopharmaceutical companies while the regulatory supervisionand administrative control remain with the government. As a result, all plasma collection stations are now having direct supply relationship with their parentfractionation facilities. Set out below are some of the safety features at China’s plasma collection stations: •Plasma collection stations can only source plasma from donors that are the local residents within the assigned districts approved by the provincialhealth authorities. •Plasma collection stations must perform a health check on the donor. Once the donor passes the health check, a “donor permit” is issued to thedonor. The standards of the health check are established by the health authorities at the PRC State Council level. •The designing and printing of the “donor permit” is administrated by the provincial health authorities, autonomous region or municipalitygovernment, as the case maybe. The “donor permit” cannot be altered, copied or assigned. •Before donors can donate plasma, the station must verify their identities and the validity of their “donor permits”. The donors must pass theverification procedures before they are given a health check and blood test. For those donors who have passed the verification, health check andblood test and whose plasma were donated according to prescribed procedures, the station will set up a record. •Collected plasma which passes quality testing cannot be used to produce plasma products until its donor donates again after a 90-day quarantineperiod and the subsequently donated plasma passes quality testing as well. •All plasma collection stations are subject to the regulations on the prevention of communicable diseases. They must strictly adhere to the sanitaryrequirements and reporting procedures in the event of an epidemic situation. The operation of plasma collection stations is subject to stringent regulations by the PRC government. We estimate that there were close to 260 plasmacollection stations in operation in China as of December 31, 2018. Importation of plasma products According to current PRC regulations, except for human albumin and recombinant factor VIII products, all the plasma products are banned from importationinto China. Production of plasma products The manufacture and sale of plasma products are subject to stringent regulations by the PRC government. Under PRC law, each variation in the packaging,dosage and concentration of medical products requires separate registration and approval by the NMPA before it may be commercially available for sale. Forexample, among our human albumin products, only human albumin 20%/10ml, 20%/25ml, 20%/50ml, 10%/100ml, 10%/20ml, 10%/50ml, 25%/50ml and20%/50ml (10g, from factor IV) products have been approved and are commercially available. All references in this report to our manufacture and sale ofhuman albumin relate to our approved human albumin products. 27 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The table below illustrates the PRC approval process for the manufacture and sale of new medicines: Stage Activities1 Pre-clinical Research The pre-clinical research stage mainly involves the following steps: ●initiate the research project, study the project feasibility and develop a plan for testing and producing thenew medicine; ●develop the scope and the techniques for testing the new medicine in the laboratory; ●develop laboratory-scale manufacturing process for the new medicine; ●develop the manufacturing process for the new medicine on an expanded basis in the workshop; and ●develop the virus inactivation process/techniques, engage qualified institution to assess the virusinactivation process/techniques, and report the related documents to the related government authority forre-assessment. 2 Clinical trial application The clinical trial application stage mainly involves the following steps: ●submit required sample products and documents to the PMPA. The PMPA will perform an on-siteexamination on the documents and equipment, and then transfer all the required materials to the NMPA,who will further review the documents and test the sample products; ●submit a draft clinical trial program to the NMPA for the application of the clinical trial; and ●obtain approval of the clinical trial. 3 Clinical trials Clinical trials range from Phase I to IV: ●Phase I: preliminary trial of clinical pharmacology and human safety evaluation studies. The primaryobjective is to observe the pharmacokinetics and the tolerance level of the human body to the newmedicine as a basis for ascertaining the appropriate delivery methods or dosage. ●Phase II: preliminary exploration on the therapeutic efficacy. The purpose is to assess preliminarily theefficacy and safety of the new medicine on patients and to provide the basis for designing dosage tests inphase III. ●Phase III: confirm the therapeutic efficacy. The objective is to further verify the efficacy and safety of thenew medicine on patients, to evaluate the benefits and risks and finally to provide sufficient experimentalevidence to support the registration application of the new medicine. ●Phase IV: application research conducted after the launch of a new medicine. The objective is to observethe efficacy and adverse reaction of the new medicine under extensive use, to perform an evaluation of thebenefits and risks of the application among ordinary or special group of patients, and to ascertain andoptimize the appropriate dosage and formula for application. 4 Registration The registration stage mainly involves the following steps: ●submit documents related to pre-clinical and clinical trials to the PMPA, which will perform on-siteinspection on the clinical trials and then transfer the related documents to the NMPA for further review; ●receive on-site inspection by the NMPA on three consecutive sample productions at the productionfacilities; ●obtain the new drug certification and a drug registration number (assuming the applicant has a validPharmaceutical Manufacturing Permit and the requisite production conditions for the new medicine havebeen met). Pharmaceutical Manufacturing Permit To manufacture pharmaceutical products in China, a pharmaceutical manufacturing enterprise should obtain a Pharmaceutical Manufacturing Permit issuedby the competent pharmaceutical administration authorities at the provincial level. Among other things, such a permit sets forth the permit number, the name,legal representative and registered address of the enterprise, the site and scope of production, issuing institution, date of issuance and effective period. Each Pharmaceutical Manufacturing Permit issued to a pharmaceutical manufacturing enterprise is effective for a period of five years. Any enterprise holdinga Pharmaceutical Manufacturing Permit is subject to review by the relevant regulatory authorities on an annual basis. Such enterprise is required to apply forrenewal of such permit within six months prior to its expiration and will be subject to re-assessment by the issuing authorities in accordance with the theneffective legal and regulatory requirements for the purposes of such renewal. We have obtained the Pharmaceutical Manufacturing Permit for the pharmaceutical products of Shandong Taibang in January 1, 2016, which will expire onDecember 31, 2020; the Pharmaceutical Manufacturing Permit for the pharmaceutical products of Guizhou Taibang in January 1, 2016, which will expire onDecember 31, 2020; and the Pharmaceutical Manufacturing Permit for the pharmaceutical products of Huitian in February 19, 2016 which will expire onDecember 31, 2020. GMP standard The World Health Organization encourages the adoption of good manufacturing practice, or GMP, standards in pharmaceutical production in order tominimize the risks involved in any pharmaceutical production that cannot be eliminated by testing the final products. A GMP certification certifies that a manufacturer’s factory and quality management system have met certain criteria for engaging in the planning andmanufacturing of drug products in various aspects, including, among others, institution and staff qualifications, production premises and facilities,equipment, production management, quality controls, production operation, maintenance of sales records and management of customer complaints andadverse event reports. In January 2011, the Ministry of Health, or MOH, issued an updated set of GMP standards, also known as the new GMP, to replace theprevious version issued in 1998. All of our pharmaceutical production facilities are required to obtain GMP certificates for their pharmaceutical production activities. Shandong TaibangSource: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.obtained the GMP certificate for its new facility in February 2018. In January 2019, Guizhou Taibang obtained the renewed GMP certificates for both of itsplasma production facility and its placenta polypeptide production facility. Huitian obtained the GMP certificate from the NMPA for its new plasmaproduction facility in February 2016 and commenced commercial production thereafter. 28 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. MDMEL Pursuant to the Measures for the Supervision and Administration of Medical Device Production promulgated on July 30, 2014 by the NMPA and amended onNovember 17, 2017, to establish an enterprise producing Class I medical devices, the applicant shall undergo the formalities for the recordation of Class Imedical devices at the local medical products administration at the level of a districted city, and submit the photocopy of the recordation certificate for theproduced medical devices held by the enterprise undergoing recordation and relevant materials. To establish an enterprise engaging in the production ofClass II or Class III medical devices, the applicant shall file an application for production licensing with the local medical products administration of theprovince, autonomous region, or municipality directly under the Central Government. The medical products administration of a province, autonomousregion or municipality directly under the Central Government shall examine the application materials within 30 working days after the date of acceptance,and conduct on-site verification according to the requirements of quality management rules for medical device production. If the prescribed conditions aremet, the medical products administration shall make a written decision to approve licensing in accordance with law, and issue the MDMEL within tenworking days; and if the prescribed conditions are not met, the medical products administration shall make a written disapproval decision, and give anexplanation on reasons. Therefore, a manufacturer will not be able to commence any business operations without submitting a filing or obtaining a MDMEL. Pursuant to the Administrative Measures for the Registration of Medical Devices promulgated by the NMPA, which became effective on October 1, 2014,Class I medical devices shall be managed by record-filing, while Class II and Class III medical devices shall be managed by registration. Manufacturersengaging in producing Class I medical devices are required to file with the city-level medical products administrative authorities of which the manufacturersare located. Production of Class II medical devices is subject to the inspection and approval and the grant of registration certificates for medical device by themedical products administrative authorities under the PRC government at the province, autonomous region and municipality levels. Production of Class IIImedical devices is subject to the inspection and approval and the grant of a medical device registration certificate by the NMPA. A medical deviceregistration certificate is valid for five years and the holder of a certificate shall apply for extension within six months prior to its expiration. TianXinFu is required to obtain the MDMEL for its production activities and it obtained the MDMEL (Scope of Production Activities: Class III medicaldevice: III-6846-1, III-6846-2, III-6864-1 and Class II medical device: II-6810) in Beijing in December 2016. Permit for Medical Device Operation According to Measures on the Supervision and Administration of the Business Operations of Medical Devices promulgated by the NMPA on July 30, 2014,which was last amended and became effective on November 17, 2017, the business operations of medical devices shall be subject to classified managementaccording to the degree of risks of medical devices. Enterprises engaging in the operations of Class I medical devices are not required to obtain approval orsubmit a filing; enterprises engaging in the operation of Class II medical devices are required to file with medical products administrative authorities at thecity level in which the enterprises operate, while enterprises engaging in the operations of Class III medical devices shall apply to the medical productsadministrative authorities at the city level in which the enterprises operate to obtain the operation permits. The term of validity of the Permit for MedicalDevice Operation is five years. The operating enterprise is required to submit an annual report to the medical products administrative authorities each year.To maintain the validity of the permit, the operating enterprise is required to submit an extension application six months prior to its expiration date. TianXinFu obtained the Permit for Medical Device Operation for engaging in the operations of certain Class III medical devices on July 15, 2016, which willexpire on March 1, 2020. Pricing Prior to June 1, 2015, retail prices of certain pharmaceutical products were subject to various price-related regulations. According to the “Regulations onControlling Blood Products” promulgated by the PRC State Council in 1996, regional offices of the Pricing Bureau and the NHC had the authority toregulate retail prices for controlled plasma products. Effective on June 1, 2015, the NDRC removed the retail price ceilings for all drug products (except foranesthetics and category I antipsychotics) in China. After the pricing ceiling for plasma products was removed, the pricing of our products is mainly subjectto the provincial tendering mechanism. In addition, retail prices of our plasma products fully or partially covered under the national insurance system are alsoaffected by the reimbursement ceilings set out in the NRDL. See “Item 3.D. Key Information—Risk Factors—Risks Relating to Our Business—We do nothave discretion to increase the prices of certain of our products, which are subject to the regional government tendering mechanism.” Two-invoice System In order to further optimize the order of purchasing and selling pharmaceutical products and reduce circulation steps, as required by the 2016 List of MajorTasks in Furtherance of the Healthcare and Pharmaceutical Reforms issued by the General Office of the State Council on April 21, 2016, the “two-invoiceSystem” will be fully implemented in the PRC. According to the Circular on Issuing the Implementing Opinions on Carrying out the Two-invoice System forDrug Procurement among Public Medical Institutions (for Trial Implementation), or Circular 4, which was effective from December 26, 2016, the two-invoicesystem means one invoice between the pharmaceutical manufacturer and the pharmaceutical distributor, and one invoice between the pharmaceuticaldistributor and the hospital, and thereby only allows a single level of distributor for the sale of pharmaceutical products from the pharmaceuticalmanufacturer to the hospital. According to Circular 4, two-invoice system will be promoted in pilot provinces (autonomous regions and municipalitiesdirectly under the Central Government) involved in the comprehensive medical reform program and pilot cities for public hospital reform on a priority basis,while other regions are encouraged to implement such system, so that such system can be promoted in full swing nationwide in 2018. Taxation Enterprise Income Tax On March 16, 2007, the National People’s Congress of China passed the Enterprise Income Tax Law, or the EIT Law, as most recently amended on December29, 2018, and on November 28, 2007, the PRC State Council passed its implementation rules, which became effective on January 1, 2008. The EIT Law andits implementation rules impose a unified EIT of 25.0% on all domestic-invested enterprises and foreign investment enterprises, or FIEs, unless they qualifyunder certain limited exceptions. According to the EIT Law and its implementation rules, the income tax rate of an enterprise that has been determined to be ahigh and new technology enterprise may be reduced to 15.0% with the approval of relevant tax authorities. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 29 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In addition to the changes to the tax structure, under the EIT Law, an enterprise established outside of China with “de facto management bodies” withinChina is considered a resident enterprise and will normally be subject to an EIT of 25.0% on its global income. The implementation rules define the term “defacto management bodies” as “an establishment that exercises, in substance, overall management and control over, among others, the production, business,recruitment and accounting aspects of a Chinese enterprise.” If the PRC tax authorities subsequently determine that we should be classified as a resident enterprise, then our global income will be subject to PRC incometax of 25%. For detailed discussion of PRC tax issues related to resident enterprise status, see “Item 3.D. Key Information—Risk Factors—Risks Relating toDoing Business in China—Under the Enterprise Income Tax Law, we may be classified as a “resident enterprise” of China. Such classification will likelyresult in unfavorable tax consequences to us and our non-PRC shareholders.” The EIT Law confirmed that qualified high and new technology enterprises may enjoy a preferential income tax rate of 15%, instead of the uniform enterpriseincome tax rate of 25%. The PRC Ministry of Science and Technology, the PRC Ministry of Finance and the State Administration of Taxation, or SAT,jointly promulgated the Measures for Determination of High and New Technology Enterprise January 29, 2016 to provide the detailed rules for theexamination of qualifications and approval of certificates for high and new technology enterprises. Each high and new technology enterprise certificate isvalid for three years. Shandong Taibang was recognized by Shandong provincial government as a high and new technology enterprise in 2008 and the latest renewal of itsqualification was obtained in December 2017, which entitled it to continue to enjoy a preferential income tax rate of 15.0% for a three-year period from 2017to 2019. Guizhou Taibang was recognized by Guizhou provincial government as a high and new technology enterprise and the latest renewal of itsqualification was obtained in November 2017, which entitled it to continue to enjoy a preferential income tax rate of 15.0% for a three-year period from 2017to 2019. TianXinFu was recognized by Beijing provincial government as a high and new technology enterprise in 2009 and the latest renewal of itsqualification was obtained in September 2018, which entitled TianXinFu to enjoy a preferential income tax rate of 15.0% till the end of 2020. Huitian wasrecognized by Beijing provincial government as a high and new technology enterprise in 2009 and the latest renewal of its qualification was obtained inOctober 2017, which entitled Huitian to enjoy a preferential income tax rate of 15.0% from 2017 to 2019. According to Notice on Issues Concerning Relevant Tax Policies in Deepening the Implementation of the Western Development Strategy jointlypromulgated by the PRC Ministry of Finance, the PRC General Administration of Customs and SAT on July 27, 2011, enterprises located in the westernregion of China which have at least 70.0% of their income from the businesses falling within the Category of Encouraged Industries in western region ofChina may enjoy a preferential income tax of 15.0% within the period from January 1, 2011 to December 31, 2020. Guizhou Taibang, being a qualifiedenterprise located in the western region of China, enjoys a preferential income tax rate of 15.0% effective from January 1, 2011 to December 31, 2020. Foreign currency exchange The principal regulations on foreign currency exchange in the PRC is the Regulations of the People’s Republic of China on Foreign Exchange Control,promulgated by the State Council on January 29, 1996, and as most recently amended on August 5, 2008. Under these regulations, RMB is freely convertiblefor current account items, such as trade and service-related foreign exchange transactions, but not for capital account items, such as direct investment, loan orinvestment in securities outside China unless the prior approval of, and/or registration with SAFE or its local counterparts (as the case may be) is obtained. Pursuant to the Regulations of the People’s Republic of China on Foreign Exchange Control Rules, FIEs in China may purchase foreign currency without theapproval of SAFE for trade and service-related foreign exchange transactions by providing commercial documents evidencing these transactions. They mayalso retain foreign exchange (subject to a cap approved by SAFE) to satisfy foreign exchange liabilities or to pay dividends. In addition, if a foreign companyacquires a company in China, the acquired company will also become an FIE. However, the relevant PRC government authorities may limit or eliminate theability of FIEs to purchase and retain foreign currencies in the future. In addition, foreign exchange transactions for direct investment, loan and investment insecurities outside China are still subject to limitations and require approvals from, and/or registration with, SAFE. On June 1, 2015, the Notice of the State Administration of Foreign Exchange on Reforming the Administrative Approach Regarding the Settlement of theForeign Exchange Capitals of Foreign-invested Enterprises came into effect and then was specified by the Notice of the State Administration of ForeignExchange on Reforming and Standardizing the Administrative Provisions on Capital Account Foreign Exchange Settlement promulgated on June 9, 2016,which deepened the reform of the foreign exchange administration system and helped meet the needs of FIEs for business and fund operations. This noticeallows FIEs to settle their foreign exchange capitals on a discretionary basis. Moreover, the Provisions on Foreign Exchange Administration Over DirectInvestment Made by Foreign Investors in the PRC were promulgated by the SAFE on May 10, 2013 in order to promote and facilitate foreign investors tomake direct investment in the PRC, which allow a FIE that needs to remit funds abroad to purchase and remit foreign exchange with the relevant bank due tocapital reduction, liquidation, advance recovery of investment, profit distribution, etc. after due registration. SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Authenticity and ComplianceVerification, or SAFE Circular 3, effective on January 26, 2017. SAFE Circular 3 relaxes the policy restriction on foreign exchange inflow to further enhancetrade and investment facilitation, including expanding the scope of foreign exchange settlement for domestic foreign exchange loans, allowing the capitalrepatriation for offshore financing backed by domestic guarantee, facilitating the centralized management of foreign exchange funds of multinationalcompanies, and allowing the offshore institutions within pilot free trade zones to settle foreign exchange in domestic foreign exchange accounts. SAFECircular 3 also tightens the authenticity and compliance verification process of cross-border transactions and cross-border capital flow, such as requiringbanks to verify board resolutions, tax filing form, and audited financial statements before wiring foreign invested companies’ foreign exchange distributionabove US$50,000. Dividend distributions Under applicable PRC regulations, FIEs in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRCaccounting standards and regulations. In addition, an FIE in China is required to set aside at least 10% of its after-tax profit based on PRC accountingstandards each year to its general reserves until the accumulative amount of such reserves reaches 50% of its registered capital. These reserves are notdistributable as cash dividends. The board of directors of an FIE also has the discretion to allocate a portion of its after-tax profits to staff welfare and bonusfunds, which may not be distributed to equity owners except in the event of liquidation. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 30 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In addition, under the EIT law, the Notice of the State Administration of Taxation on Negotiated Reduction of Dividends and Interest Rates, promulgated onJanuary 29, 2008, the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation andPrevention of Fiscal Evasion, or the Double Taxation Treaty, which became effective on August 21, 2006, and the Notice of the State Administration ofTaxation Regarding Beneficial Owners under Tax Treaties, which became effective on February 3, 2018, dividends from our PRC subsidiary, TaibangBiotech (Shandong) Co., Ltd., paid to us through our Hong Kong subsidiary, Taibang Holdings, may be subject to a withholding tax at a rate of 10%, or at arate of 5% if Taibang Holdings is considered a “beneficial owner” that is generally engaged in substantial business activities in Hong Kong and entitled totreaty benefits under the Double Taxation Treaty. Our Employees As of December 31, 2018, 2017 and 2016, we employed 2,187, 1,912 and 1,799 full-time employees, respectively, of which 27, 41 and 48, respectively, wereseconded to us by Shandong Institute of Biological Products, or the Shandong Institute. As of December 2018, we had 54 employees in our headquarter inBeijing, 632 employees in the production facility in Shandong Province, 415 employees in the production facility in Guizhou Province, 151 employees inthe production facility in Beijing, and 935 employees in total in our plasma collection stations in Shandong, Guizhou, Hebei and Guangxi. We believe we are in material compliance with all applicable labor and safety laws and regulations in China. We participate in various employee benefitplans that are organized by municipal and provincial governments, including retirement, medical, unemployment, work injury and maternity benefit plansfor our managerial and key employees. In addition, we provide short term insurance plans for certain employees while on duty to cover work relatedaccidents. We believe that we maintain a satisfactory working relationship with our employees and we have not experienced any significant labor disputes orany difficulties in recruiting staff for our operations. C.Organizational Structure The following chart reflects our current corporate structure as of the date of this report: 31 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (1)Pursuant to an investment entrustment agreement dated September 12, 2008, Shandong Taibang holds the 35.0% equity interest in Huitian as a nomineefor the benefit of Taibang Biological. For further details on the investment entrustment agreement, see our Current Report on Form 8-K filed with theSEC on October 16, 2008. (2)On January 1, 2018, we acquired 100% equity interest in Health Forward Holding Limited, a holding company organized under the laws of Hong Kong,which in turn holds 80% equity interest in TianXinFu. (3)On November 22, 2018, Taibang Biotech (Shandong) Co., Ltd. established Taina Dabang (Shanghai) Medical Technology Co., Ltd., the principalactivities of which are sales and various advisory services related to biotechnology and medical technology. D.Property, Plants and Equipment Our corporate offices, which occupy approximately 1,348 square meters, are leased and located at 18th Floor, Jialong International Building, 19 ChaoyangPark Road, Chaoyang District, Beijing 100125, the People’s Republic of China. The information of other material properties is listed as below. Business Location Approximate Size (square meters) Owned/Leased Manufacturing Facilities Taishan District, Tai’an City, Shandong Province, China 15,489 Owned Gaoxin District, Tai’an City, Shandong Province, China 91,335 Owned Huaxi District, Guiyang City, Guizhou Province, China 13,282 Owned Changping District, Beijing City, China 6,385 Owned We believe that all of our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our business. 32 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ITEM 4A. UNRESOLVED STAFF COMMENTS. None. ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our financialstatements and the notes thereto and the other financial information appearing elsewhere in this report. In addition to historical information, the followingdiscussion contains certain forward-looking information. See “Special Note Regarding Forward Looking Statements” above for certain informationconcerning those forward looking statements. In evaluating our business, you should carefully consider the information provided under the caption “Item3.D. Key Information—Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risksand uncertainties. Our financial statements are prepared in U.S. dollars and in accordance with United States generally accepted accounting principles. A. Operating Results Overview We are principally engaged in the research, development, manufacturing and sales of plasma products in China. We also develop, manufacture and marketcertain other biopharmaceutical products and regenerative medical biomaterial products. We have a strong biopharmaceutical product portfolio with over 20 different dosage forms of plasma products across nine categories and otherbiopharmaceutical products. Our principal biopharmaceutical products are human albumin and IVIG. These products use human plasma as their principal rawmaterial. Sales of human albumin products represented approximately 32.0%, 35.8% and 39.2% of our total sales for 2018, 2017 and 2016, respectively.Sales of IVIG products represented approximately 24.3%, 31.7% and 34.6% of our total sales for 2018, 2017 and 2016, respectively. All of ourbiopharmaceutical products are prescription medicines administered in the form of injections. Our regenerative medical biomaterial products mainly include bio-artificial dura mater and spinal dura mater products which are applied in brain and spinalsurgeries. Our sales model focuses on direct sales to hospitals and inoculation centers and is complemented by distributor sales. In 2018, we generated sales of $466.9million, an increase of 26.1% from 2017, and recorded net income attributable to our Company of $128.1 million, an increase of 88.7% from 2017, afterfactoring in $7.5 million income tax reversal and $40.3 million income tax charge respectively in 2018 and 2017, related to the new U.S. income tax law thatwent into effect on December 22, 2017 (the “U.S. Tax Reform”). Financial Performance Highlights The following are some financial highlights for 2018: ·Sales: Sales increased by $96.5 million, or 26.1%, to $466.9 million for 2018 from $370.4 million for 2017. Excluding TianXinFu, sales increasedby $51.8 million, or 14.0%, to $422.2 million for 2018 from $370.4 million for 2017. ·Gross Profit: Gross profit increased by $75.2 million, or 30.7%, to $320.1 million for 2018 from $244.9 million for 2017. As a percentage of sales,gross profit increased from 66.1% in 2017 to 68.6% in 2018. ·Income from operations: Income from operations increased by $10.3 million, or 7.6%, to $146.2 million for 2018 from $135.9 million for 2017.Operating margin decreased to 31.3% in 2018 from 36.7% in 2017. Excluding TianXinFu, income from operations decreased by 7.2% in RMB termsand 5.1% in USD terms in 2018 compared to 2017, and operating margin decreased to 30.6% from 36.7% in 2017. ·Net income attributable to our Company: Net income attributable to our Company, factoring in $7.5 million income tax reversal and $40.3 millionincome tax charge related to the U.S. tax reform, respectively in 2018 and 2017, increased by $60.2 million, or 88.7%, to $128.1 million for 2018from $67.9 million for 2017. Excluding TianXinFu and factoring in the income tax reversal and charges, net income attributable to the Companyincreased by 63.6% in RMB terms and 69.4% in USD terms in 2018 compared to 2017. ·Fully diluted earnings per share: Fully diluted earnings per share was $3.53 for 2018, as compared to $2.38 for 2017. Principal Factors Affecting Our Financial Performance The following are key factors that affect our financial condition and results of operations and we believe them to be important to the understanding of ourbusiness: Raw material supply and prices The primary raw material used in the production of our albumin, immunoglobulin and coagulation factor products is human plasma. The collection of humanplasma in China is generally influenced by a number of factors such as government regulations, geographical locations of plasma collection stations, sanitaryconditions of plasma collection stations, living standards of the donors, and cultural and religious beliefs. If we experience any shortage of plasma supply, wemay not be able to fully utilize our production capacity. We currently operate 15 plasma collection stations (including two branch collection facilities)through Shandong Taibang and two plasma collection stations through Guizhou Taibang. These plasma collection stations provide us with a stable source ofplasma supply. 33 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Biological collagen is the primary raw material for our biomaterial products. The supply and market prices of biological collagen may be adversely affectedby intense competition and availability and conditions of supply. Prices of and demand for our products The demand for our products is largely affected by the general economic conditions in China because the prices of our products are still not affordable tomany patients. A significant improvement in the economic environment in China will likely improve consumer income which in turn would make ourproducts more affordable and consequently increase the demand for our products. We have been able to expand our product range and consumer base byintroducing new products required by customers. We believe that our technical expertise is important in introducing products that are in demand. Production capacity Our sales volume is limited by our annual production capacity. As we grow our business in the future, our ability to fulfill additional and larger orders willdepend on our ability to increase our production capacity. Our plan to expand our production capacity will depend on the availability of capital to meet ourneeds of expansion or upgrading of production lines, and the availability of stable raw material supply. To comply with applicable PRC laws and regulations,we have maintained permits and licenses necessary for the current operations of our plasma collection stations and production plants, and are required toapply for such permits and licenses to operate new plasma collection stations and production plants. As a result, our expansion plan also depends on ourability to renew existing permits and licenses and obtain new permits and licenses. Competition We face intense competition from local and foreign entities that manufacture and sell products that compete with ours in the PRC. These competitors mayhave more capital, better research and development resources, expanded manufacturing and marketing capabilities and more experience than we do. In ourindustry, we compete based upon product quality, production cost, ability to produce a diverse range of products and logistical capabilities. Our profitability may be adversely affected if competition intensifies, competitors reduce prices, PRC government requires us to reduce the prices of ourproducts, or competitors develop new products or product substitutes with comparable medicinal applications or therapeutic effects which are more effectiveor less costly than ours. See “Item 4.B. Information on the Company—Business Overview—Business—Competition” for more information. Taxation As of December 31, 2018, China Biologic is subject to United States tax at gradual rates of up to 35.0%. On December 22, 2017, President Trump signed intolaw the “Tax Cuts and Jobs Act,” which may impact our U.S. tax obligations. See “Item 3.D. Key Information—Risk Factors—Risks Relating to Our Business—The recently enacted tax reform bill could adversely affect our business and financial condition.” Taibang Biological is incorporated in the BVI, but is not subject to taxation in that jurisdiction. Taibang Holdings is incorporated in Hong Kong, and under the current laws of Hong Kong, is subject to a Profits Tax of 16.5% on profits arising in HongKong. However, no provision for Hong Kong Profits Tax has been made as Taibang Holdings has no taxable income. Health Forward is incorporated in Hong Kong, and under the current laws of Hong Kong, is subject to a Profits Tax of 16.5% on profits arising in Hong Kong.However, no provision for Hong Kong Profits Tax has been made as Health Forward has no taxable income. According to the PRC government policy, new or high technology companies may enjoy a preferential income tax rate of 15.0%, instead of 25.0% under theEIT Law. In October 2017, Shandong Taibang renewed its high and new technology enterprise qualification, which entitled it to enjoy a preferential incometax rate of 15.0% for a period of three years from 2017 to 2019. TianXinFu was recognized by Beijing provincial government as a high and new technologyenterprise since 2009 and renewed the certificate in 2018, as a result of which TianXinFu is entitled to enjoy a preferential income tax rate of 15.0% for aperiod of three years from 2018 to 2020. According to Notice on Issues Concerning Relevant Tax Policies in Deepening the Implementation of the WesternDevelopment Strategy jointly promulgated by the PRC Ministry of Finance, the PRC General Administration of Customs and SAT dated July 27, 2011,Guizhou Taibang, being a qualified enterprise located in the western region of China, enjoys a preferential income tax rate of 15.0% effective from January 1,2011 to December 31, 2020. All of our other PRC subsidiaries are subject to the statutory income tax rate of 25.0%. Critical Accounting Policies The preparation of financial statements in conformity with United States generally accepted accounting principles, or U.S. GAAP, requires our managementto make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and relateddisclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that require the more significant judgmentsand estimates in the preparation of financial statements, including the following: Allowance for doubtful accounts We maintain an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance,management considers historical losses, the customers’ financial condition, the amount of accounts receivable in dispute, the accounts receivable aging andcustomers’ payment patterns. We review our allowance for doubtful accounts monthly. Past due balances are reviewed individually for collectability.Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.We do not have any off-balance-sheet credit exposure related to our customers. 34 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Before 2017, we generally asked our distributors to pay in advance before we delivered products and granted a credit period of no longer than 90 days tohospitals and clinics. In 2017, as a result of the nationwide implementation of healthcare reform measures and the intensified competition for access todistribution channels, we extended the credit period for both distributors and hospitals and clinics depending on the relevant parties’ creditability. Theaverage accounts receivable turnover day for plasma products was 95 days in 2018. We have provided a bad debt allowance of $655,148, $23,783 and$123,239 respectively for 2018, 2017 and 2016. Business Combination We accounts for our business combination using the acquisition method in accordance with ASC Topic 805 (“ASC 805”): Business Combinations. Anacquirer is required to recognize the identifiable acquired assets, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisitiondate, measured at their fair values as of that date. The consideration transferred of an acquisition is measured as the aggregate of the fair values at the date ofexchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies asof the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. The excess of (i) the total purchase price and fair value ofthe non-controlling interests over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. Long-lived assets As of December 31, 2018 and 2017, our long-lived assets primarily consisted of property, plant, equipment, intangible assets, land use rights and goodwill. We depreciate and amortize our property, plant, equipment, intangible assets with finite useful life and land use rights using the straight-line method over theestimated useful lives of the assets. We make estimates of the useful lives of plant and equipment (including the salvage values), intangible assets and landuse rights, in order to determine the amount of depreciation expense to be recorded during each reporting period. We estimate the useful lives at the time theassets are acquired based on historical experience with similar assets as well as anticipated technological or other changes. Long-lived assets, including property, plant and equipment, land use rights and intangible assets subject to amortization, are reviewed for impairmentwhenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived assetor asset group be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by that asset or asset group to itscarrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognizedto the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flowmodels, quoted market values and third-party independent appraisals, as considered necessary. Goodwill represents the excess of the aggregate purchase price over the fair value of identifiable assets acquired and liabilities assumed. Goodwill is notamortized, but is tested for impairment at the reporting unit level on at least an annual basis and more frequently when an event occurs or circumstanceschange that would more likely than not reduce the fair value of a reporting unit below its carrying amount. When performing an evaluation of goodwillimpairment, we have elected the option to first assess qualitative factors, such as significant events and changes to expectations and activities that may haveoccurred since the last impairment evaluation, to determine if it is more likely than not that goodwill might be impaired. If as a result of the qualitativeassessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the quantitative fair value test is performedto determine if the fair value of the reporting unit exceeds its carrying value. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU2017-04”). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. In computing theimplied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets andliabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired andliabilities assumed in a business combination. As a result of ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair valueof a reporting unit with its carrying amount and then recognize an impairment charge, as necessary, for the amount by which the carrying amount exceeds thereporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for fiscal years and interimperiods within those years beginning after December 15, 2019, and early adoption is permitted for interim or annual goodwill impairment tests performedafter January 1, 2017. We have adopted ASU 2017-04 for annual goodwill impairment tests from January 1, 2018. This guidance removes Step 2 of the goodwill impairment test,which required the estimation of an implied fair value of goodwill in the same manner as the calculation of goodwill upon a business combination. 35 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Results of Operations The following table sets forth a summary of our consolidated statements of comprehensive income for the periods indicated. Our historical results presentedbelow are not necessarily indicative of the results that may be expected for any other future period. For the Years Ended December 31, 2018 2017 2016 $ % ofTotalSales $ % ofTotal Sales $ % of TotalSales (U.S. dollars in thousands, except percentage and per share data) SALES 466,878 100.0 370,407 100.0 341,169 100.0 COST OF SALES 146,787 31.4 125,517 33.9 124,034 36.4 GROSS PROFIT 320,091 68.6 244,890 66.1 217,135 63.6 OPERATING EXPENSES Selling expenses 95,576 20.5 34,844 9.4 11,679 3.4 General and administrative expenses 68,817 14.8 67,684 18.3 54,519 16.0 Research and development expenses 9,524 2.0 6,504 1.7 7,022 2.1 Total operating expenses 173,917 37.3 109,032 29.4 73,220 21.5 INCOME FROM OPERATIONS 146,174 31.3 135,858 36.7 143,915 42.1 OTHER INCOME (EXPENSES) Equity in income of equity method investee 2,369 0.5 3,509 0.9 2,519 0.7 Interest income 13,707 3.0 7,624 2.1 7,816 2.3 Interest expense (338) (0.1) (583) (0.2) (254) - Loss from disposal of a subsidiary - - - - (76) - Other income, net 4,093 0.9 - - - - Total other income, net 19,831 4.3 10,550 2.8 10,005 3.0 INCOME BEFORE INCOME TAX EXPENSE 166,005 35.6 146,408 39.5 153,920 45.1 INCOME TAX EXPENSE 18,036 3.9 64,172 17.3 25,126 7.4 NET INCOME 147,969 31.7 82,236 22.2 128,794 37.7 Less: Net income attributable to noncontrolling interest 19,911 4.3 14,293 3.9 24,014 7.0 NET INCOME ATTRIBUTABLE TO COMPANY 128,058 27.4 67,943 18.3 104,780 30.7 EARNINGS PER SHARE OF ORDINARY SHARES BASIC 3.54 2.40 3.79 DILUTED 3.53 2.38 3.74 Comparison of years ended December 31, 2018 and 2017 Sales Our total sales increased by 26.1%, or $96.5 million, to $466.9 million for 2018, compared to $370.4 million for 2017. In RMB terms, our total salesincreased by 23.5% for 2018 as compared to 2017. The increase in sales for 2018 was partly attributable to a $44.7 million contribution from TianXinFu,which accounted for approximately 9.6% of total sales for 2018. Excluding TianXinFu, total sales in 2018 increased by 11.7% in RMB terms as a result ofincreases in the sales of placenta polypeptide products, human albumin products, certain special immunoglobulin products, and coagulation factor products,which was partly offset by decreases in the sales of IVIG products. For plasma products, total sales in 2018 increased by 8.0% in RMB terms, or 10.2% in USDterms, to $354.0 million from $321.2 million in 2017. The following table summarizes the breakdown of sales by product categories: For the Years Ended December 31, Change 2018 2017 $ % $ % Amount % (U.S. dollars in millions, except percentage) Plasma products Human albumin 149.4 32.0 132.5 35.8 16.9 12.8 Immunoglobulin products: IVIG 113.5 24.3 117.5 31.7 (4.0) (3.4)Other immunoglobulinproducts 59.5 12.7 50.1 13.5 9.4 18.8 Others 31.6 6.8 21.1 5.7 10.5 49.8 Placenta polypeptide 68.2 14.6 49.2 13.3 19.0 38.5 Biopharmaceuticalproducts 422.2 90.4 370.4 100.0 51.8 14.0 Artificial Dura Mater 40.6 8.7 - - 40.6 - Others 4.1 0.9 - - 4.1 - Biomaterial products 44.7 9.6 - - 44.7 - Totals 466.9 100.0 370.4 100.0 96.5 26.1 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 36 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. As a percentage of total sales, sales from human albumin products and IVIG products accounted for 32.0% and 24.3%, respectively, for 2018. Excluding thecontribution from TianXinFu, human albumin and IVIG products were 35.4% and 26.9% of total sales, respectively. The average prices for human albumin and IVIG products decreased by 5.6% and 2.3%, respectively, in RMB terms in 2018 compared to 2017 because ofgreater sales volume in the distributor channel and lower prices to certain distributors reflecting intensified market competition for major plasma products. InUSD terms, the average price for human albumin decreased by 3.6% in 2018 compared to 2017, and the average price for IVIG remained stable in 2018compared to 2017. The sales volume of our products depends on market demand and our production volume. The production volume of our human albumin products and IVIGproducts depends primarily on the general plasma supply. The production volume of our hyper-immune products, which include human rabiesimmunoglobulin, human hepatitis B immunoglobulin and human tetanus immunoglobulin products, is subject to the availability of specific vaccinatedplasma and our production capacity. The supply of specific vaccinated plasma requires several months of lead time. Our production facility currently canonly accommodate the production of one type of hyper-immune products at any given time and we rotate the production of different types of hyper-immuneproducts from time to time in response to market demand. As such, the sales volume of any given type of hyper-immune products may vary significantly fromperiod to period. The sales volume of our human albumin increased by 17.0% in 2018 as compared to 2017, primarily due to increased sales volumes in the distributor andpharmacy channels, which was partly offset by decreased prescription volumes at various hospitals due to the ongoing healthcare regulatory changes inChina. The sales volume of IVIG products decreased by 3.4% for 2018 compared to 2017, mainly reflecting decreased prescription volumes at varioushospitals with the same effect of policy headwinds to human albumin. The sales increase of other immunoglobulin products for 2018 as compared to 2017 was mainly attributable to the increase in sales volume of both humanrabies immunoglobulin and human tetanus immunoglobulin products. Revenue from other plasma products, including human coagulation factor VIII, human prothrombin complex concentrate, and the newly launched humanfibrinogen products, increased by 47.9% in RMB terms, or 49.8% in USD terms, in 2018 compared to 2017, representing 6.8% of total sales of 2018. Thegrowth mainly came from the launch of our human fibrinogen products in the beginning of 2018, and the increased sales volumes of our human coagulationfactor VIII and human prothrombin complex concentrate products, which is reflective of our ongoing medical marketing activities. Revenue from placenta polypeptide products increased by 38.5% for 2018 as compared to 2017, reaching 14.6% of total sales of 2018, which was supportedby higher unit selling prices in connection with the wider implementation of the two-invoice policy. However, the sales volume of placenta polypeptideproducts declined as a result of their inclusion in regional adjuvant drug lists, which put pressure on their prescription volume. Cost of sales & gross profit For the Years Ended December 31, Change 2018 2017 Amount % (U.S. dollars in millions, except percentage) Cost of sales $146.8 $125.5 $21.3 17.0 as a percentage of total sales 31.4% 33.9% (2.5)Gross Profit $320.1 $244.9 $75.2 30.7 Gross Margin 68.6% 66.1% 2.5 Our cost of sales was $146.8 million, or 31.4% of our sales, for 2018, as compared to $125.5 million, or 33.9% of our sales for 2017. Our gross profit was$320.1 million and $244.9 million for 2018 and 2017, respectively, representing gross margins of 68.6% and 66.1%, respectively. Our cost of sales and gross margin are affected by the product pricing, raw material costs, product mix, yields and manufactory efficiency. In an effort toincrease plasma collection volume and expand our donor base, we increased the nutrition fees paid to donors consistent with the industry practice. We expectthe nutrition fees to be paid to donors will continue to increase as a result of improving living standards in China. Consequently, future improvements onmargins will need to be derived from increases in product pricing, yields and manufacturing efficiency, as well as from optimizing the product mix. The decrease in cost of sales as a percentage of total sales mainly reflected the higher gross margin of TianXinFu. Excluding TianXinFu, cost of salesdecreased to 33.6% of total sales, mainly because of a higher sales price for our placenta polypeptide product, which was partly offset by lower sales prices forour human albumin and IVIG products. 37 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Operating expenses For the Years Ended December 31, Change 2018 2017 Amount % (U.S. dollars in millions, except percentage) Operating expenses $173.9 $109.0 $64.9 59.5 as a percentage of total sales 37.3% 29.4% 7.9 Our total operating expenses increased by $64.9 million, or 59.5%, to $173.9 million for 2018 from $109.0 million for 2017. As a percentage of total sales,total expenses increased by 7.9% to 37.3% for 2018 from 29.4% for 2017. Excluding TianXinFu, total operating expenses increased by $42.5 million, or39.0%, to $151.5 million for 2018. This increase (excluding TianXinFu) mainly consisted of an increase of $43.6 million in selling expenses, partially offsetby a decrease of $1.8 million in general and administrative expenses. Selling expenses For the Years Ended December 31, Change 2018 2017 Amount % (U.S. dollars in millions, except percentage) Selling expenses $95.6 $34.8 $60.8 174.7 as a percentage of total sales 20.5% 9.4% 11.1 For 2018, our selling expenses increased by $60.8 million, or 174.7%, to $95.6 million from $34.8 million for 2017. Nearly half of the increase came fromselling expenses associated with placenta polypeptide products with the remainder related to the sales of plasma products and TianXinFu’s sales of its duramater products. For placenta polypeptide products and certain hyper-immune products, as certain previous multi-layer distribution channels weredisqualified due to the two-invoice policy, we implemented new sales strategies including using internal sales force or engaging third-party contract serviceentities to promote our products. For other plasma products, in order to strengthen our competitiveness in front of distribution channel customers, we incurredadditional promotion and marketing costs. TianXinFu’s selling expenses included an amortization expense of $7.7 million for the intangible asset ofcustomer relationships associated with our acquisition of TianXinFu. Excluding this intangible asset amortization expense, selling expenses accounted for18.8% of total sales in 2018 compared to 9.4% in 2017. General and administrative expenses For the Years Ended December 31, Change 2018 2017 Amount % (U.S. dollars in millions, except percentage) General and administrative expenses $68.8 $67.7 $1.1 1.6 as a percentage of total sales 14.8% 18.3% (3.5) For 2018, our general and administrative expenses increased by $1.1 million, or 1.6%, to $68.8 million from $67.7 million for 2017. As a percentage of totalsales, general and administrative expenses decreased to 14.8% for 2018 from 18.3% for 2017. The slight increase in general and administrative expenses from2017 to 2018 was a combined result of 1) general and administrative expenses of TianXinFu; 2) increased legal fees mainly in relation to the lawsuit filedagainst us in the Cayman Islands by Mr. David (Xiaoying) Gao, our former Chairman and CEO whose employment with us had previously been terminatedfor cause; and 3) Shandong Taibang’s increased depreciation expenses and property tax for its new facility, which was partially offset by a decrease in share-based compensation expenses. Research and development expenses For the Years Ended December 31, Change 2018 2017 Amount % (U.S. dollars in millions, except percentage) Research and development expenses $9.5 $6.5 $3.0 46.2 as a percentage of total sales 2.0% 1.7% 0.3 For 2018, our research and development expenses increased by $3.0 million, or 46.2%, to $9.5 million from $6.5 million for 2017. In 2018 and 2017, wereceived government grants totaling $0.7 million and $0.4 million, respectively, and recognized them as a reduction of research and development expenses.Excluding this impact, our research and development expenses increased by $3.3 million for 2018 from 2017. As a percentage of total sales, our research anddevelopment expenses, excluding the impact of these recognized government grants, increased to 2.2% for 2018 from 1.9% for 2017. The increase mainlyconsisted of TianXinFu’s research and development expenses. Equity in income of equity method investee Our equity method investment represented our 35.0% equity interest in Huitian, our equity method investee. For 2018, our equity in income of equitymethod investee decreased by $1.1 million to $2.4 million from $3.5 million for 2017. 38 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Income tax expense For the Years Ended December 31, Change 2018 2017 Amount % (U.S. dollars in millions, except percentage) Income tax expense $18.0 $64.2 $(46.2) (72.0)Effective income tax rate 10.9% 43.8% (32.9) Our provision for income taxes decreased by $46.2 million, or 72.0%, to $18.0 million for 2018 from $64.2 million for 2017. For the year ended December31, 2017, we recorded an income tax charge of $40.3 million, which represented the management’s estimate of the amount of U.S. corporate income tax basedon the deemed repatriation to the United States of our accumulated earnings mandated by the U.S. Tax Reform. Based on new regulations and rules issued bythe U.S. Department of the Treasury in August 2018, the management reassessed the amount and reversed $7.5 million in the third quarter of 2018. Oureffective income tax rates were 10.9% and 43.8% for 2018 and 2017, respectively. Excluding the impact of repatriation tax, our effective income tax rate was15.4% and 16.3% for 2018 and 2017, respectively. Comparison of years ended December 31, 2017 and 2016 Sales Our total sales increased by 8.6%, or $29.2 million, to $370.4 million for 2017, compared to $341.2 million for 2016. In RMB terms, our total sales increasedby 10.5% for 2017 as compared to 2016. The increase in sales for 2017 was primarily attributable to the increase in the sales of placenta polypeptide andcertain immunoglobulin products. The following table summarizes the breakdown of sales by product categories: For the Years Ended December 31, Change 2017 2016 $ % $ % Amount % (U.S. dollars in millions, except percentage) Human albumin 132.5 35.8 133.7 39.2 (1.2) (0.9)Immunoglobulin products: IVIG 117.5 31.7 117.9 34.6 (0.4) (0.3)Other immunoglobulin products 50.1 13.5 40.1 11.8 10.0 24.9 Placenta polypeptide 49.2 13.3 32.2 9.4 17.0 52.8 Others 21.1 5.7 17.3 5.0 3.8 22.0 Totals 370.4 100.0 341.2 100.0 29.2 8.6 For 2017 as compared to 2016: ·the average price for our approved human albumin products, which represented 35.8% of our total sales for 2017, decreased by 4.3% in USD termsand 2.5% in RMB terms, mainly due to the combined effect of both a decrease in prices charged to certain distributors, which reflected intensifiedmarket competition, and a lower sales proportion from the higher-unit-price dosages compared to 2016; and ·the average price for our approved IVIG products, which represented 31.7% of our total sales for 2017, decreased by 0.8% in USD terms andincreased by 1.3% in RMB terms, mainly due to an increase in price we charged our major distributors. The sales volume of our products depends on market demand and our production volume. The production volume of our human albumin products and IVIGproducts depends primarily on the general plasma supply. The production volume of our hyper-immune products, which include human rabiesimmunoglobulin, human hepatitis B immunoglobulin and human tetanus immunoglobulin products, is subject to the availability of specific vaccinatedplasma and our production capacity. The supply of specific vaccinated plasma requires several months of lead time. Our production facility currently canonly accommodate the production of one type of hyper-immune products at any given time and we rotate the production of different types of hyper-immuneproducts from time to time in response to market demand. As such, the sales volume of any given type of hyper-immune products may vary significantly fromperiod to period. The sales volume of our human albumin increased by 3.5% in 2017 as compared to 2016, as a combined result of enhanced production volumes in GuizhouTaibang and reduced production volume in Shandong Taibang in connection with the old facility’s production suspension. The sales volume of our IVIGproducts remained stable for 2017 as compared to 2016. The sales increase of other immunoglobulin products for 2017 as compared to 2016 was mainly attributable to the increase in both average sales price andsales volume of human rabies immunoglobulin products. Revenue from placenta polypeptide products increased by 52.8% for 2017 as compared to 2016, reaching 13.3% of total sales, mainly attributable to a higherunit selling price following the wider implementation of the two-invoice policy across China in 2017, as well as an increase of 7.3% in sales volume. Revenue from other plasma products, including human coagulation factor VIII and human prothrombin complex concentrate, increased by 22.0% in 2017compared to 2016, representing 5.7% of total sales as compared to 5.0% of total sales in 2016. This growth reflects our ongoing medical marketing activities. 39 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Cost of sales & gross profit For the Years Ended December 31, Change 2017 2016 Amount % (U.S. dollars in millions, except percentage) Cost of sales $125.5 $124.0 $1.5 1.2 as a percentage of total sales 33.9% 36.4% (2.5)Gross Profit $244.9 $217.2 $27.7 12.8 Gross Margin 66.1% 63.6% 2.5 Our cost of sales was $125.5 million, or 33.9% of our sales, for 2017, as compared to $124.0 million, or 36.4% of our sales for 2016. Our gross profit was$244.9 million and $217.2 million for 2017 and 2016, respectively, representing gross margins of 66.1% and 63.6%, respectively. Our cost of sales and gross margin are affected by the product pricing, raw material costs, product mix, yields and manufactory efficiency. In an effort toincrease plasma collection volume and expand our donor base, we increased the nutrition fees paid to donors consistent with the industry practice. We expectthe nutrition fees to be paid to donors will continue to increase as a result of improving living standards in China. Consequently, future improvements onmargins will need to be derived from increases in product pricing, yields and manufacturing efficiency, as well as from optimizing the product mix. The decrease in cost of sales as a percentage of total sales was mainly due to the higher sales price of placenta polypeptide following the widerimplementation of the two-invoice policy and a greater proportion of sales derived from certain hyper-immune and coagulation products with a higher profitmargin. Operating expenses For the Years Ended December 31, Change 2017 2016 Amount % (U.S. dollars in millions, except percentage) Operating expenses $109.0 $73.2 $35.8 48.9 as a percentage of total sales 29.4% 21.5% 7.9 Our total operating expenses increased by $35.8 million, or 48.9%, to $109.0 million for 2017 from $73.2 million for 2016. As a percentage of total sales,total expenses increased by 7.9% to 29.4% for 2017 from 21.5% for 2016. The increase of the total operating expenses was primarily due to the increase ofselling expenses, as well as the increase of general and administrative expenses as discussed below. Selling expenses For the Years Ended December 31, Change 2017 2016 Amount % (U.S. dollars in millions, except percentage) Selling expenses $34.8 $11.7 $23.1 197.4 as a percentage of total sales 9.4% 3.4% 6.0 For 2017, our selling expenses increased by $23.1 million, or 197.4%, to $34.8 million from $11.7 million for 2016. More than half of the increase comesfrom placenta polypeptide products and the remaining comes from plasma products. For placenta polypeptide products and certain hyper-immune products,as certain previous multiple layers of distribution channels were disqualified due to the two-invoice regulation, we implemented new sales strategiesincluding using internal sales force or engaging third party contract service organizations to promote our products. For other plasma products, in order tosolidify our competitiveness within distribution channel customers, we incurred more promotion and marketing activities. As a percentage of total sales, ourselling expenses for 2017 increased to 9.4% from 3.4% for 2016. General and administrative expenses For the Years Ended December 31, Change 2017 2016 Amount % (U.S. dollars in millions, except percentage) General and administrative expenses $67.7 $54.5 $13.2 24.2 as a percentage of total sales 18.3% 16.0% 2.3 For 2017, our general and administrative expenses increased by $13.2 million, or 24.2%, to $67.7 million from $54.5 million for 2016. As a percentage oftotal sales, general and administrative expenses increased by 2.3% to 18.3% for 2017 from 16.0% for 2016. The increase in general and administrativeexpenses was mainly due to the increase of share-based compensation expenses of $9.5 million and $1.9 million expenses related to the redomicile mergerand the acquisition of TianXinFu. 40 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Research and development expenses For the Years Ended December 31, Change 2017 2016 Amount % (U.S. dollars in millions, except percentage) Research and development expenses $6.5 $7.0 $(0.5) (7.1)as a percentage of total sales 1.7% 2.1% (0.4) For 2017, our research and development expenses decreased by $0.5 million, or 7.1%, to $6.5 million from $7.0 million for 2016. In 2017 and 2016, wereceived government grants totaling $0.4 million and $0.8 million, respectively, and recognized them as a reduction of research and development expenses.Excluding this impact, our research and development expenses decreased by $0.9 million for 2017 from 2016. As a percentage of total sales, our research anddevelopment expenses, excluding the impact of these recognized government grants, decreased to 1.9% for 2017 from 2.3% for 2016. Equity in income of equity method investee Our equity method investment represented our 35.0% equity interest in Huitian, our equity method investee. For 2017, our equity in income of equitymethod investee increased by $1.0 million to $3.5 million from $2.5 million for 2016. Income tax expense For the Years Ended December 31, Change 2017 2016 Amount % (U.S. dollars in millions, except percentage) Income tax expense $64.2 $25.1 $39.1 155.8 Effective income tax rate 43.8% 16.3% 27.5 Our provision for income taxes increased by $39.1 million, or 155.8%, to $64.2 million for 2017 from $25.1 million for 2016. Income tax expense in 2017includes a charge of $40.3 million, which represents management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation tothe United States of accumulated earnings mandated by the U.S. tax reform. Our effective income tax rates were 43.8% and 16.3% for 2017 and 2016,respectively. Excluding the impact of repatriation tax for 2017, our effective income tax rate is 16.3%. Foreign Currency Exchange Impact All of our consolidated revenues and consolidated costs of sales and majority of expenses, as well as all of our assets (except for certain cash balances) aredenominated in RMB, whereas our reporting currency is U.S. dollars. As a result, we are exposed to foreign exchange risk as our revenues and results ofoperations may be affected by fluctuations in the exchange rate between U.S. dollars and RMB. For details, see “Item 11. Quantitative and QualitativeDisclosures about Market Risk—Foreign Exchange Risk.” Inflation Inflation does not materially affect our business or the results of our operations. B. Liquidity and Capital Resources To date, we have financed our operations primarily through cash flows from operations, augmented by bank borrowings and equity contributions by ourshareholders. As of December 31, 2018, we had $338.9 million in cash on hand and demand deposits, $537.5 million in time deposits, and $76.0 million inshort term investments. We believe that our current working capital is sufficient to meet our anticipated cash needs. We may, however, need additional cash resources in the future ifwe experience changes in business conditions or other developments, or if we find and wish to pursue opportunities for investment, acquisition, capitalexpenditure or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand, we may seek toissue debt or equity securities or obtain credit facilities. The following table sets forth a summary of our cash flows for the periods indicated: Cash Flow For the Years Ended December 31, 2018 2017 2016 USD USD USD Net cash provided by operating activities 103.9 102.2 123.3 Net cash used in investing activities (558.9) (60.9) (52.5)Net cash (used in) provided by financing activities 571.3 (18.3) (22.1)Effect of foreign exchange rate change on cash and cash equivalents 3.3 12.5 (9.8)Net increase in cash and cash equivalents 119.6 35.5 38.9 Cash and cash equivalents at beginning of the year 219.3 183.8 144.9 Cash and cash equivalents at end of the year 338.9 219.3 183.8 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 41 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Operating activities Cash inflows from operating activities totaled $103.9 million in 2018, $102.2 million in 2017, and $123.3 million in 2016. Cash inflows from operatingactivities in 2018 included a $21.8 million contribution from TianXinFu. Excluding TianXinFu, cash inflows decreased by $20.1 million in 2018 ascompared to 2017 and decreased by $21.1 million in 2017 as compared to 2016. Such decreases in cash inflows from operations in 2018 excludingTianXinFu were mainly caused by the increase in accounts receivable and decrease in income tax payable. The decreases in cash inflows from operations in2017 were mainly due to the increase in accounts receivable and inventories, which was partially offset by an increase in other payables and accruedliabilities during 2017. Accounts receivable Our average collection speed of accounts receivable continued to slow down in 2018 as compared to 2017. The accounts receivable turnover days for plasmaproducts were 95 days, 58 days, and 41 days for 2018, 2017, and 2016, respectively. The increased turnover days reflected the longer credit terms to hospitalsas a result of the nationwide implementation of healthcare reform measures and the intensified competition in the distribution channel. Income tax payable Excluding TianXinFu, income tax payable increased by $43.1 million in 2017 while decreased by $12.6 million in 2018. The increase in 2017 was mainlybecause of a repatriation tax charge of $40.3 million. In the first half of 2018, we made the first batch of tax payment of approximately $3.3 million. Based onnew regulations and rules issued by the U.S. Department of the Treasury in August 2018, the management reassessed the amount and an amount of $7.5million was reversed in the third quarter of 2018. Inventories Excluding TianXinFu, the increases in inventory for 2018, 2017 and 2016 were $42.5 million, $42.1 million and $40.1 million, respectively. The increase ofinventories reflected a slow-down of production and sales in reaction to the weaker market demand due to more aggressive-than-expected implementation ofcertain government healthcare reform policies. Investing activities Cash outflows from investing activities for 2018 was $558.9 million, as compared to $60.9 million and $52.5 million for 2017 and 2016, respectively. In2018, we paid $36.6 million for the acquisition of property, plant and equipment, intangible assets and land use rights, and we also prepaid $10.8 million forinvestments in equity securities, and purchased time deposit and short term investments in the amount of $2,726.8 million. This was partly offset by $97.7million in cash received upon acquisition of TianXinFu and $2,117.6 million from the maturity of time deposits and short term investments. In 2017, we paid $38.3 million for the acquisition of property, plant and equipment, intangible assets and land use rights and we also purchased time depositin the amount of $22.7 million. In 2016, we paid $51.0 million for the acquisition of property, plant and equipment, intangible assets and land use rights and provided loans of $12.3 millionto Xinjiang Deyuan, which was partially offset by a $10.3 million refund of deposits on land use rights from the local government. Financing activities Cash inflows from financing activities for 2018 totaled $571.3 million, as compared to cash outflows from financing activities of $18.3 million for 2017 and$22.1 million for 2016. Cash inflows from financing activities in 2018 mainly included proceeds of $590.3 million from the issuance and sale of an aggregate of 5,850,000 ordinaryshares of us to certain investors, and $1.1 million from stock options exercised, partially offset by a dividend of $10.1 million paid by Shandong Taibang toits noncontrolling interest shareholders, and a prepayment of $10.0 million to an investment bank for potential share repurchases. Cash outflows from financing activities in 2017 mainly consisted of the dividends payment of $18.8 million made by our subsidiary to noncontrollinginterest shareholder, partially offset by proceeds of $0.9 million received from stock options exercised . Cash outflows from financing activities in 2016 mainly consisted of payment of $58.1 million to the former minority shareholders of Guizhou Taibang inconnection with their capital withdrawal from Guizhou Taibang and a dividend payment of $7.9 million by our subsidiary to noncontrolling interestshareholder, partially offset by the maturity of a $37.8 million time deposit as a security for a bank loan that was fully repaid in June 2015 and proceeds of$3.6 million from stock option exercised. Management believes that our Company has sufficient cash on hand and will continue to have positive cash inflow for its operations from the sale of itsproducts in the PRC market. C. Research and Development, Patents and Licenses, etc. Our research and development efforts consist of in-house development and partnership with leading international players to expand our product line toinclude plasma products that have higher margins and are technologically more advanced. We also seek to continue to improve the yield for our products.For further details of our pipeline products, see “Item 4.B. Information on the Company—Business Overview—Business—Our Research and DevelopmentEfforts.” 42 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. D. Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period fromJanuary 1, 2018 to December 31, 2018 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capitalresources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. E. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors. F. Tabular Disclosure of Contractual Obligations The following table sets forth our material contractual obligations as of December 31, 2018: Payments due by period Contractual Obligations Total Less thanone year One to three years Three to five years More than five years (U.S. dollars in millions) Operating lease commitment 2.1 0.8 1.1 - 0.2 Purchase commitment 58.2 14.0 44.2 - - Capital commitment 10.2 9.2 1.0 - - Total 70.5 24.0 46.3 - 0.2 G. Safe Harbor Please see “Special Note Regarding Forward Looking Statements” above. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A.Directors and Senior Management Set forth below are the names of our current directors, officers and significant employees, their ages, all positions and offices that they hold with us, the periodduring which they have served as such, and their business experience during at least the last five years. NAME AGE POSITIONJoseph Chow(1) 55 Chairman of the BoardBing Li(1) 50 Director, Chief Executive Officer (the “CEO”)David Hui Li(1) 50 DirectorSean Shao(1) 62 DirectorYungang Lu(1) 55 DirectorYue’e Zhang(1) 56 DirectorQi Ning(1) 55 DirectorMing Yang 47 Chief Financial Officer (the “CFO”)Huaming He 52 Chief Business Officer (the “CBO”) (1)Our classified Board consists of three classes of directors. Class I directors currently consist of Mr. Joseph Chow and Ms. Yue’e Zhang, with termexpiring in 2019. Class II directors currently consist of Mr. Sean Shao, Mr. David Hui Li and Mr. Qi Ning, with term expiring in 2020. Class III directorscurrently consist of Dr. Yungang Lu and Dr. Bing Li, with term expiring in 2021. Mr. Joseph Chow. Mr. Chow has been a member of our Board since November 3, 2014 and our Chairman since February 3, 2019. Mr. Chow has over 20 yearsof experience in corporate finance, financial advisory and management and has held senior executive and managerial positions in various public and privatecompanies. Mr. Chow is a managing director of Centurium Capital. Previously Mr. Chow was a managing director of Moelis and Company and a managingdirector at Goldman Sachs (Asia) LLP. Prior to that, he served as an independent financial consultant, as chief financial officer of Harbor Networks Limited,and as chief financial officer of China Netcom (Holdings) Company Limited. Prior to that, Mr. Chow served as the director of strategic planning ofBombardier Capital, Inc., as vice president of international operations of Citigroup and as the corporate auditor of GE Capital. Mr. Chow is currently anindependent non-executive director for China ZhongDi Dairy Holdings Company Limited, a company listed on the Stock Exchange of Hong Kong. Mr.Chow obtained a Bachelor of Arts degree in political science from Nanjing Institute of International Relations and a Master of Business Administrationdegree from the University of Maryland at College Park. Mr. Chow is a Class I director. Dr. Bing Li. Dr. Li has been a member of our Board since July 25, 2018 and our chief executive officer since August 13, 2018. He previously served on ourBoard from February 2011 to May 2014. Dr. Li served as a managing director of Fosun Group, a Chinese international conglomerate and investmentcompany, from March 2016 to December 2017 and a vice president of Shanghai Fosun Pharmaceutical (Group) Co., Ltd., a Chinese pharmaceutical productsmanufacturer, from May 2014 to February 2016. Prior to that, Dr. Li served as an executive director of Warburg Pincus Asia LLC (“Warburg Pincus”), anAmerican private equity firm, from June 2010 to May 2014 and as a general manager of GlaxoSmithKline, a British pharmaceutical company, from August2006 to June 2010. From 1999 to 2006, Dr. Li held multiple roles in Eli Lilly and Company, a global pharmaceutical company, including manager, strategicsourcing consultant, associate consultant and business development associate. Dr. Li received a B.S. in biophysics from Fudan University, a Ph.D. in Cell andMolecular Biology from University of Rochester, and a MBA and MEM from Northwestern University. Dr. Li is a Class III director. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 43 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Mr. David Hui Li. Mr. Li has been a member of our Board since November 4, 2013 and served as our Chairman from July 2018 to January 2019. Mr. Li isalso the founder and chief executive officer of Centurium Capital. Mr. Li was an executive director and a managing director at Warburg Pincus from February2002 to January 2016. Prior to joining Warburg Pincus, Mr. Li worked in the investment banking division of Goldman Sachs from 2001 to 2002 and MorganStanley from 1994 to 2001. Mr. Li received a B.S. in economics from Renmin University of China and an M.B.A. from Yale University School ofManagement. Mr. Li is a Class II director. Mr. Sean Shao. Mr. Shao has been a member of our Board since July 24, 2008. In addition to his roles with us, Mr. Shao currently serves as independentdirector and chairman of the audit committee of: 21Vianet Group, Inc., a carrier-neutral internet data center services provider listed on Nasdaq since August2015; Jumei International Holding Ltd., an e-commerce company listed on NYSE since May 2014; LightInTheBox Holdings Co. Ltd., an e-commercecompany listed on NYSE since June 2013; and UTStarcom Holdings Corp., a provider of broadband equipment and solutions listed on Nasdaq since October2012. He served as the chief financial officer and a board member of Trina Solar Limited from 2006 to 2008 and from 2015 to 2017, respectively. In addition,Mr. Shao served from 2004 to 2006 as the chief financial officer of ChinaEdu Corporation, an educational service provider, and of Watchdata TechnologiesLtd., a Chinese security software company. Prior to that, Mr. Shao worked at Deloitte Touche Tohmatsu CPA Ltd. for approximately a decade. Mr. Shaoreceived his master’s degree in health care administration from the University of California at Los Angeles in 1988 and his bachelor’s degree in art from EastChina Normal University in 1982. Mr. Shao is a member of the American Institute of Certified Public Accountants. Mr. Shao is a Class II director. Dr. Yungang Lu. Dr. Lu has been a member of our Board since March 19, 2012. Dr. Lu is a Managing Partner of Fort Hill Capital Limited (“Fort Hill”), aninvestment partnership focusing on the global equity market. Prior to Fort Hill, Dr. Lu has served as a Managing Director of Seres Asset Management Limited,a Hong Kong-based Asian investment specialist, from August 2009 to October 2016, and a Managing Director of APAC Capital Advisors Limited, aninvestment manager focusing on Greater China equities, from 2004 to July 2009. Dr. Lu also serves as a director of two listed companies - China TechfaithWireless Communication Technology Ltd., a handheld device company in China, and Global Cord Blood Corporation, a provider of cord blood storageservices primarily in China. Dr. Lu was a research analyst with Credit Suisse First Boston (Hong Kong), a financial services company, from 1998 to 2004,where his last position was the head of China Research, and was a research analyst with JP Morgan Securities Asia, a financial services company, in HongKong from 1997 to 1998. Dr. Lu received a B.S. in Biology from Peking University, an M.S. in Biochemistry from Brigham Young University and a Ph.D. inFinance from the University of California, Los Angeles. Dr. Lu is a Class III director. Ms. Yue’e Zhang. Ms. Yue’e Zhang was appointed as a director on our Board on January 1, 2018, pursuant to the investor rights agreement dated as ofJanuary 1, 2018 by and between the Company and PW Medtech Group Limited, a major shareholder of the Company. Ms. Zhang has worked in the medicaldevice industry for over 20 years and has accumulated considerable experience in product design, research and development, and management andinvestment. She currently serves as the chairman of the board and an executive director of PW Medtech Group Limited, a company listed on the Hong KongStock Exchange. She is also a founder and shareholder of Lepu Medical Technology (Beijing) Co., Ltd., a company listed on the Shenzhen Stock Exchange.Ms. Zhang obtained a bachelor’s degree in material science and engineering from Xi’an Jiaotong University, and two master degrees in material science andmanagement from Xi’an University of Technology and Florida International University, respectively. Ms. Zhang is a Class I director. Mr. Qi Ning. Mr. Ning has been a member of our Board since July 25, 2018. Mr. Ning has been an executive director and chief executive officer of SinnetCloud Data Co., Ltd., a company specializing in marketing and promoting AWS cloud products and related services in China, since May 2018, a generalpartner of Tianjin Aman Enterprise Management GP, a consulting and management company, since May 2018 and a managing partner of IntermarketAdvisory LLP, a company offering advisory and consulting services to financial institutions in TMT sectors, since January 2018. From August 2012 toDecember 2017, Mr. Ning held multiple roles in 21Vianet Group, a Chinese carrier neutral cyber infrastructure services provider, including senior advisor,executive vice president, chief operating officer, senior vice president and general manager of Blue Cloud Tech Co., Ltd., a wholly owned subsidiary of21Vianet Group. Prior to that, Mr. Ning served as an executive director and chief executive officer of China Netcom Broadband Corporation Ltd., a jointventure telecom services provider between China Netcom Group Corporation and PCCW, the dominant carriers from North China and Hong Kong, and amanaging director of China Broadband Capital, a TMT-focused private equity fund; from June 2004 to August 2008, as an executive director of ChinaNetcom Broadband Corporation Ltd., a Chinese residential broadband services provider; from 1999 to June 2004 as acting general manager of ZhejiangProvincial Branch of China Netcom Group Corporation, vice president of China Netcom Broadband Corporation Ltd., a subsidiary of China Netcom HoldingCorp., Ltd., assistant to COO and general manager of Carrier & International Services BU of China Netcom Holding Corp., Ltd., a Chinese telecommunicationservices provider. Mr. Ning received a Bachelor degree of Engineering in Nuclear Physics and a Master degree of Engineering in Industrial and InnovationEconomics from Tsinghua University. Mr. Ning is a Class II director. Mr. Ming Yang. Mr. Yang has been our CFO since August 7, 2012. Mr. Yang served as our interim CFO between May 31 and August 6, 2012 and our VicePresident-Finance & Compliance and Treasurer between March 30, 2012 and August 6, 2012. Mr. Yang also serves as an independent director for KunmingJida Pharmaceutical. Mr. Yang has six years of financial management experience in corporations and 11 years of audit experience in accounting firms.Mr. Yang has extensive experience in dealing with the PRC tax regulations, PRC GAAP, IFRS and internal control matters. He was an audit senior manager atKPMG, where he provided audit services for initial public offerings, right issues and merger and acquisition transactions. He also worked on the annual auditsof various public companies listed in Hong Kong and mainland China. His audit clients ranged from state-owned enterprises and Chinese listed companies tomultinational companies, including Angang Steel, Shenhua Energy, BOE Technology and BHP Billiton. Mr. Yang is a certified public accountant in China. Dr. Huaming He. Dr. Huaming (Homer) He has been our CBO (Chief Business Officer) since December 3, 2018, in charge of the commercial portion of thegrowing market in China. Dr. He has more than 30 years’ professional experiences in the healthcare industry, especially in the Greater China area. From 2015to 2018, he worked as the Vice President & General Manager of Danaher Dental Platform which is one of the US Fortune Top 500 corporations, and tookresponsibilities on its Ormco/ABT/Nobel Biocare businesses in the Greater China area. Before that, he served on several senior commercial positions inmultinational corporations such as MSD, a U.S.-headquartered company ranking among the top 10 in the global pharmaceutical market, andGlaxoSmithKline plc (GSK), a leading British pharmaceutical company. Previously Dr. He also worked in China state-owned enterprises such as ShanghaiJing’An Pharmaceutical Co., Ltd. which is invested by Shanghai Leiyunshang Pharmaceutical West Area Co., Ltd., in the areas of pharmaceuticals, vaccines,and medical device consumables. Dr. He possesses a Bachelor Degree of Clinical Medicine from Tongji University as well as an EMBA certificate from ajoint program of Shanghai Jiaotong University and Rotman Business School, University of Toronto. He is a Certificated Clinical Doctor in China, with 4years’ clinical medical experience as a surgeon in hospitals. 44 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. There are no agreements or understandings for any of our executive officers or directors to resign at the request of another person and no officer or director isacting on behalf of nor will any of them act at the direction of any other person. To the best of our knowledge and belief, except as disclosed in “Item 7.B.Major Shareholders and Related Party Transactions—Related Party Transactions,” there are no arrangements or understandings with any of our directors,executive officers, principal shareholders, customers, suppliers, or any other person, pursuant to which any of our directors or executive officers were selected. Directors and executive officers are elected or appointed until their successors are duly elected or appointed and qualified. Family Relationships There are no family relationships among our directors or executive officers. B.Compensation In 2018, we paid an aggregate of approximately US$2.5 million in cash to our executive officers, and approximately US$0.4 million in cash to our non-executive directors. We also granted restricted shares to our executive officers and directors, as set forth in “Item 6.B. Directors, Senior Management andEmployees—Compensation—Employees’ Share Incentive Plans”. Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance,medical insurance, housing fund, unemployment and other statutory benefits. Except for the above statutory contributions, we have not set aside or accruedany amount to provide pension, retirement or other similar benefits to our executive officers and directors. Employment Agreements Each of Bing Li, Ming Yang, and Huaming He has entered into an employment agreement with the Company. The employment agreements set forth theirrespective base salary levels, subject to annual adjustment by the Compensation Committee or the Board, as the case may be. The employment agreementsalso provide that each of these executive officers is eligible to receive a discretionary bonus, which is linked to annual corporate and individual performanceestablished by the Compensation Committee. Our employment agreement with each of Bing Li and Ming Yang contains severance and change of control arrangements, which provide that if suchexecutive’s employment is terminated by the Company without cause, he will be entitled to receive a cash severance payment equal to 12 months of his thencurrent base salary, payable in 12 equal monthly installments, and that if his employment is terminated by the Company upon certain change of controlevents, such as certain mergers or consolidations of the Company or sale or disposition of all or substantially all of the Company’s assets, he will be entitledto receive a cash severance payment equal to 18 months of his then current base salary, payable in 18 equal monthly installments. These employmentagreements also provide that the Company will indemnify these executives against expenses and liabilities such executives reasonably incur in connectionwith any suit or proceeding in which they may be involved by reason of their service as executives of the Company. We have also entered into a standard form of director agreement with each of our directors. Under these agreements, we pay cash compensations to ourdirectors and reimburse them for pre-approved reasonable business-related expenses incurred in good faith in the performance of the directors’ duties for ourCompany. In addition, we have entered into an indemnification agreement with each of our directors, pursuant to which we have agreed to indemnify ourdirectors against certain liabilities and expenses incurred by them in connection with claims made by reason of their being a director of our Company. In addition to his director agreement and indemnification agreement, Mr. David Hui Li entered into a consulting agreement with us on July 1, 2016, whichwas terminated on July 11, 2018 by mutual agreement between Mr. David Hui Li and us. Under this agreement, Mr. David Hui Li had advised the Companyand the management on short-term and long-term strategies, potential acquisition transactions, potential strategic partnerships and alliances, and potentialfinancial and capital market activities. As a compensation to Mr. David Hui Li, the Company had awarded him certain restricted shares. Employees’ Share Incentive Plan Effective May 9, 2008, the Board adopted the 2008 Equity Incentive Plan (the “2008 Plan”) and reserved a total of five million ordinary shares of theCompany to be issued pursuant to the 2008 Plan. The 2008 Plan provides for grants of share options, share appreciation rights, performance units, restrictedshares, restricted share units and performance shares. These equity awards were granted at the discretion of the Compensation Committee to align theexecutive officers’ interests with those of the shareholders and provide the executive officers with a significant incentive to manage the Company from theperspective of an owner with an equity stake in the business. The 2008 Plan expired on May 9, 2018 and substantially all ordinary shares reserved under the2008 Plan had been granted. As of December 31, 2018, 605,391 restricted shares and options to purchase 107,304 ordinary shares of the Company were outstanding under the 2008 Plan. 45 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The following table sets forth the outstanding options granted under our 2008 Plan as of December 31, 2018 for each of our executive officers and directors. Number ofsecuritiesunderlyingunexercisedoptionsexercisable Optionexerciseprice Option Name (#) ($) expiration date David Hui Li — — — Bing Li — — — Sean Shao — — — Yungang Lu 30,000 9.16;9.85 From March 19, 2022 to August31, 2022 Joseph Chow — — — Yue’e Zhang — — — Qi Ning — — — Ming Yang — — — Huaming He — — — Total Directors and Executive Officers 33,750 The following table sets forth the outstanding restricted share awards as of December 31, 2018 for each of our executive officers and directors. Number of shares that have not vested Name (#) Date of grant David Hui Li 6,000 From August 18, 2017 to April 3, 2018 Bing Li — — Sean Shao 10,500 From August 18, 2017 to April 3, 2018 Yungang Lu 9,000 From August 18, 2017 to April 3, 2018 Joseph Chow 6,000 From August 18, 2017 to April 3, 2018 Yue’e Zhang 4,000 April 3, 2018 Qi Ning — — Ming Yang 87,000 From August 3, 2015 to April 3, 2018 Huaming He — — Total Directors and Executive Officers 122,500 The following paragraphs summarize the principal terms of our 2008 Plan. Plan Administration. Our 2008 Plan is administered by the Board or the Compensation Committee of the Board. Our board of directors or the CompensationCommittee, as applicable, has the authority, among other things, to determine the participants to receive awards under the 2008 Plan, the number and type ofawards to be granted to each participant, and the terms and conditions of each award, and to construe and interpret the terms of the 2008 Plan and the awards. Award Agreements. Awards granted under the 2008 Plan are evidenced by an award agreement that sets forth the terms and conditions for each award granted,which may include, among other things, the type of the award, the vesting schedule, the exercise price, restrictions on transferability and the expiration date. Eligibility. The 2008 Plan allows grant of awards to employees, directors and consultants of the Company or any of our subsidiaries. Term of Awards. The term of each equity award is stated in the relevant award agreement, provided that the term will not exceed ten years from the date of thegrant. Vesting Schedule. In general, the plan administrator determines the vesting schedule for each award, which is specified in the relevant award agreement. Change in Control. In the event of a merger or change in control of the Company, the surviving or successor entity may either assume the Company’s rightsand obligations with respect to outstanding awards under the 2008 Plan or substitute outstanding awards for substantially equivalent awards that are subjectto terms and conditions no less favorable to the participants than those in effect prior to the merger or change in control. In the event that the successor entitydoes not assume or substitute outstanding awards, the awards will be fully vested and all restrictions will lapse. Transfer Restrictions. Awards granted under the 2008 Plan may not be transferred in any manner by the recipient other than by will or the laws of descent anddistribution. Termination of the Plan. The 2008 Plan expired on May 9, 2018. Termination of the 2008 Plan does not affect the plan administrator's ability to exercise itspowers with respect to awards granted under the 2008 Plan prior to the termination date. C.Board Practices We are governed by a Board that currently consists of seven members divided into three classes. Class I directors currently consist of Mr. Joseph Chow andMs. Yue’e Zhang, with term expiring in 2019. Class II directors currently consist of Mr. Sean Shao, Mr. David Hui Li and Mr. Qi Ning, with term expiring in2020. Class III directors currently consist of Dr. Yungang Lu and Dr. Bing Li, with term expiring in 2021. Mr. Qi Ning and Dr. Bing Li were appointed to theBoard on July 25, 2018. All other directors have served on the Board since the beginning of the current term of the respective class. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 46 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Dr. Bing Li’s employment agreement with us contains severance arrangements. See “Item 6.B. Directors, Senior Management and Employees—Compensation—Employment Agreements.” None of the other directors on our Board has a service contract with us that provides for benefits upon termination of service. Our Board currently has three standing committees: the Audit Committee, Compensation Committee and Governance and Nominating Committee, which,pursuant to delegated authority, perform various duties on behalf of and report to the Board. The Board has adopted a written charter for each of thecommittees which are available on our website at http://www.chinabiologic.com. Audit Committee Our Audit Committee is currently composed of three members: Mr. Sean Shao, Dr. Yungang Lu and Mr. Qi Ning. Mr. Shao serves as Chair of the AuditCommittee. Our Board determined that each member of the Audit Committee meets the independence criteria prescribed by applicable rules and regulationsof the SEC for audit committee membership and is an “independent” director within the meaning of the Nasdaq Marketplace Rules. Each Audit Committeemember also meets Nasdaq’s financial literacy requirements. Our Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements. It is responsible for, among otherthings: ·selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independentauditors; ·reviewing with our independent auditors any audit problems or difficulties and management’s response; ·reviewing and approving all proposed related-party transactions; ·discussing the annual audited financial statements with management and our independent auditors; ·reviewing the adequacy and effectiveness of our internal control over financial reporting; ·annually reviewing and reassessing the adequacy of our audit committee charter; ·such other matters that are specifically delegated to our Audit Committee by our Board from time to time; ·meeting separately and periodically with management and our internal and independent auditors; and ·reporting regularly to the full Board. Our Board has determined that Mr. Shao is the “audit committee financial expert” as such term is defined in Item 407(d) of Regulation S-K promulgated bythe SEC and also meets Nasdaq’s financial sophistication requirements. Compensation Committee Our Compensation Committee is currently composed of three members: Mr. Qi Ning, Mr. Sean Shao, and Dr. Yungang Lu, each of whom is “independent”within the meaning of the Nasdaq Marketplace Rules. Mr. Ning serves as Chair of the Compensation Committee. Our Compensation Committee assists the Board in reviewing and approving the compensation structure of executive officers, including all forms ofcompensation to be provided to our executive officers. Our CEO may not be present at any committee meeting during which his compensation is deliberated. The Compensation Committee is responsible for, among other things: ·approving and overseeing the compensation package for our executive officers; ·reviewing and approving corporate goals and objectives relevant to the compensation of our CEO, evaluating the performance of our CEO inlight of those goals and objectives, and setting the compensation level of our CEO based on this evaluation; and ·reviewing periodically and making recommendations to the Board regarding any long-term incentive compensation or equity plans, programsor similar arrangements, annual bonuses, employee pension and welfare benefit plans. Governance and Nominating Committee Our Governance and Nominating Committee is currently composed of three members: Dr. Yungang Lu, Mr. Joseph Chow and Mr. Qi Ning, each of whom is“independent” within the meaning of the Nasdaq Marketplace Rules. Dr. Lu serves as Chair of the Governance and Nominating Committee. The Governance and Nominating Committee assists the Board in identifying individuals qualified to become our directors and in determining thecomposition of the Board and its committees. 47 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Governance and Nominating Committee is responsible for, among other things: ·identifying and recommending to the Board nominees for election or re-election to the Board, or for appointment to fill any vacancy; ·reviewing annually with the Board the current composition of the Board in light of the characteristics of independence, age, skills, experienceand availability of service to us; ·identifying and recommending to the Board directors to serve as members of the Board’s committees; and ·monitoring compliance with our Corporate Governance Guidelines. D.Employees See “Item 4.B. Information on the Company—Business Overview—Business—Our Employees.” E.Share Ownership The following table sets forth information regarding beneficial ownership of our ordinary shares as of March 1, 2019 (i) by each person who is known by us tobeneficially own more than 5% of our ordinary shares; (ii) by each of our executive officers and directors; and (iii) by all of our executive officers anddirectors as a group. Unless otherwise specified, the address of each of the persons set forth below is in care of the Company, 18th Floor, Jialong InternationalBuilding, 19 Chaoyang Park Road, Chaoyang District, Beijing 100125, People’s Republic of China. Name and Address ofBeneficial Owner Office, If Any Title of Class Amount andNature ofBeneficialOwnership (1) Percent ofClass (2) Officers and Directors Joseph Chow (3) Director, Chairman of the Board Ordinary Share 12,509 * Bing Li (4) Director, CEO Ordinary Share 14,000 * David Hui Li (5) Director Ordinary Share 4,882,446 12.4%Sean Shao (6) Director Ordinary Share 12,000 * Yungang Lu (7) Director Ordinary Share 82,000 * Yue’e Zhang (8) Director Ordinary Share 2,000 * Qi Ning Director Ordinary Share — — Ming Yang (9) CFO Ordinary Share 18,108 * Huaming He CBO Ordinary Share — — All officers and directors as a group Ordinary Share 5,023,063 12.8% 5% Security Holders PW Medtech Group Limited (10) Ordinary Share 6,321,000 16.1%Liu Yufeng (11) Ordinary Share 2,204,133 5.6%Centurium Holdings (BVI) Ltd. (12) Ordinary Share 4,858,177 12.3%Capital Research Global Investors(13) Ordinary Share 2,087,348 5.3%Parfield International Ltd. (14) Ordinary Share 2,682,742 6.8%Marc Chan (14) Ordinary Share 3,180,696 8.1%CITIC Capital Holdings Limited (15) Ordinary Share 3,450,863 8.8%Hillhouse Capital Advisors, Ltd. (16) Ordinary Share 2,751,200 7.0% * Less than 1% (1)Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect tosecurities. Except as indicated in the footnotes below, each of the beneficial owners listed above has direct ownership of and sole voting power andinvestment power with respect to our ordinary shares.(2)As of March 1, 2019, a total of 39,361,616 ordinary shares of the Company were outstanding. For each beneficial owner above, any securities that areexercisable or convertible within 60 days have been included for the purpose of computing the number of shares beneficially owned and thepercentage ownership of such beneficial owner pursuant to SEC Rule 13d-3(d)(1). We did not deem such shares to be outstanding, however, forpurposes of calculating the percentage ownership of any other person.(3)Represents 10,509 ordinary shares of the Company and 2,000 ordinary shares to be issued within 60 days after March 1, 2019 upon vesting ofrestricted shares of the Company granted under the 2008 Plan.(4)Represents 14,000 ordinary shares of the Company.(5)Represents 22,269 ordinary shares of the Company directly owned by Mr. David Hui Li, 2,000 ordinary shares to be issued within 60 days after March1, 2019 upon vesting of restricted shares of the Company granted under the 2008 Plan, and 4,858,177 ordinary shares of the Company owned byBeachhead Holdings Limited (“Beachhead”) and deemed to be beneficially owned by Mr. David Hui Li, as reported in a Schedule 13D/A filed withthe SEC by Beachhead, Centurium Capital Partners 2018, L.P. (“CCP 2018”), Centurium Capital Partners 2018 GP Ltd. (“Centurium GP”), CenturiumCapital 2018 Co-invest, L.P. (“CCCI 2018”), Centurium Capital 2018 SLP-B Ltd. (“Centurium SLP-B”), Centurium Holdings Ltd. (“Centurium GPHoldco”), Centurium Holdings (BVI) Ltd. (“Centurium TopCo”) and Mr. David Hui Li on February 4, 2019. CCP 2018 and CCCI 2018 are theshareholders of Beachhead. Centurium GP is the sole general partner of CCP 2018. Centurium SLP-B is the sole general partner of CCCI 2018.Centurium GP Holdco is the sole shareholder of Centurium GP and Centurium SLP-B. Centurium TopCo is the sole shareholder of Centurium GPHoldco. Mr. David Hui Li is the sole shareholder and director of Centurium TopCo.Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 48 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (6)Represents 8,500 ordinary shares of the Company and 3,500 ordinary shares to be issued within 60 days after March 1, 2019 upon vesting of restrictedshares of the Company granted under the 2008 Plan.(7)Represents 49,000 ordinary shares of the Company, 3,000 ordinary shares to be issued within 60 days after March 1, 2019 upon vesting of restrictedshares of the Company granted under the 2008 Plan, 20,000 ordinary shares of the Company underlying a ten-year nonstatutory share option grantedunder the 2008 Plan, fully vested and exercisable at $9.16 per share, and 10,000 ordinary shares of the Company underlying a ten-year nonstatutoryshare option granted under the 2008 Plan, fully vested and exercisable at $9.85 per share.(8)Represents 2,000 ordinary shares to be issued within 60 days after March 1, 2019 upon vesting of restricted shares of the Company granted under the2008 Plan.(9)Represents 10,608 ordinary shares of the Company and 7,500 ordinary shares to be issued within 60 days after March 1, 2019 upon vesting ofrestricted shares of the Company granted under the 2008 Plan.(10)Represents 6,321,000 ordinary shares of the Company owned by PW Medtech Group Limited as reported in a Schedule 13D/A filed with the SEC byPW Medtech Group Limited, Cross Mark Limited and Ms. Liu Yufeng on September 24, 2018. The registered address of PW Medtech Group Limitedis the Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands.(11)Represents 2,204,133 ordinary shares of the Company owned by PW Medtech Group Limited and deemed to be beneficially owned by Cross MarkLimited and by Ms. Liu Yufeng as reported in a Schedule 13D/A filed with the SEC by PW Medtech Group Limited, Cross Mark Limited and Ms. LiuYufeng on September 24, 2018. PW Medtech Group Limited is owned as to approximately 34.9% by Cross Mark, which is its single largestshareholder and deemed as its controlling shareholder under the Rules Governing the Listing of Securities on The Stock Exchange of Hong KongLimited, and Cross Mark Limited is wholly-owned by Ms. Liu Yufeng. The registered address of Cross Mark Limited is Portcullis Chambers, 4th Floor,Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands VG1110, and the business address of Ms. LiuYufeng is 15/F, BOC Group Life Assurance Tower, No. 136 Des Voeux Road Central, Hong Kong. Ms. Liu Yufeng is the mother of Ms. Yue'e Zhang.(12)Represents 4,858,177 ordinary shares of the Company owned by Beachhead as reported in a Schedule 13D/A filed with the SEC by Beachhead, CCP2018, Centurium GP, CCCI 2018, Centurium SLP-B, Centurium GP Holdco, Centurium TopCo and Mr. David Hui Li on February 4, 2019. CCP 2018and CCCI 2018 are the shareholders of Beachhead. Centurium GP is the sole general partner of CCP 2018. Centurium SLP-B is the sole general partnerof CCCI 2018. Centurium GP Holdco is the sole shareholder of Centurium GP and Centurium SLP-B. Centurium TopCo is the sole shareholder ofCenturium GP Holdco. Mr. David Hui Li is the sole shareholder and director of Centurium TopCo. The address of the principal business of each ofBeachhead, CCP 2018, Centurium GP, CCCI 2018, Centurium SLP-B and Centurium GP Holdco is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The address of the principal business of Centurium TopCo is Kingston Chambers, PO Box 173, Road Town, Tortola, BritishVirgin Islands. The address of principal business of Mr. David Hui Li is 22th Floor, Building A1, Central Park Plaza, No.10 Yard, Chaoyang ParkSouth Road, Chaoyang District, Beijing 100026, China.(13)Represents 2,087,348 ordinary shares of the Company deemed to be beneficially owned by Capital Research Global Investors as reported in aSchedule 13G/A filed with the SEC by Capital Research Global Investors on February 14, 2019. Capital Research Global Investors, a division ofCapital Research and Management Company (“CRMC”), is deemed to be the beneficial owner of our ordinary shares as a result of CRMC acting asinvestment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The address of the businessoffice of Capital Research Global Investors is 333 South Hope Street, Los Angeles, CA 90071.(14)Represents 2,682,742 ordinary shares of the Company held by Parfield International Ltd. and 497,954 ordinary shares of the Company held byAmplewood Resources Ltd., as reported in a Schedule 13G/A filed by Parfield International Ltd. and Marc Chan on February 12, 2019. Marc Chan isthe director and sole shareholder of Parfield International Ltd. and Amplewood Resources Ltd. The address of the business office of each of ParfieldInternational Ltd. and Marc Chan is Unit No. 21E, 21st Floor, United Centre, 95 Queensway Admiralty, Hong Kong.(15)Represents 3,450,863 ordinary shares of the Company held by CITIC Capital China Partners IV, L.P. (“CCCP IV”) and deemed to be beneficiallyowned by CITIC Capital Holdings Limited (“CCHL”) as reported in a Schedule 13D/A filed with the SEC by CCCP IV, CCP IV GP Ltd. (“CCP IVGP”), CITIC Capital Partners Limited (“CCPL”), and CCHL on October 31, 2018. CCP IV GP is the sole general partner of CCCP IV. CCP IV GP is awholly owned subsidiary of CCP Ltd. CCP Ltd. is a wholly owned subsidiary of CCPL. CCHL owns 51% of the issued and outstanding ordinaryshares of CCPL. The registered address of each of CCCP IV, CCP IV GP and CCPL is Walkers Corporate Limited, Cayman Corporate Centre, 27Hospital Road, George Town, Grand Cayman, KY1-9008, Cayman Islands. The address of CCHL’s principal executive office is 28/F, CITIC Tower, 1Tim Mei Avenue, Central, Hong Kong.(16)Represents 2,751,200 ordinary shares of the Company as reported in a Schedule 13G/A filed with the SEC by Hillhouse Capital Advisors, Ltd. onFebruary 14, 2019. The address of the principal executive office of Hillhouse Capital Advisors, Ltd. is Suite 2202, 22nd Floor, Two InternationalFinance Centre, 8 Finance Street, Central, Hong Kong. Except as disclosed in “Item 7.B. Major Shareholders and Related Party Transactions—Related Party Transactions,” none of our shareholders has differentvoting rights from other shareholders. To our knowledge, as of March 1, 2019, approximately 77.2% of our ordinary shares were held of record by 432holders in the United States. There are no arrangements known to us, the operation of which may at a subsequent date result in a change in control of the Company. ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to “Item 6.E. Directors, Senior Management and Employees—Share Ownership.” B. Related Party Transactions Investor Rights Agreement with PW Medtech Group Limited On January 1, 2018, we acquired 80% equity interest in TianXinFu, a medical device company primarily engaging in the manufacturing and sale ofregenerative medical biomaterial products, from PWM, which was not a shareholder or otherwise a related party of us before this transaction. In exchange forthe acquisition of TianXinFu’s equity, we issued 5,521,000 ordinary shares to PWM. PWM further acquired 800,000 ordinary shares of us on September 21,2018 in a private placement (see “Item 7.B. Major Shareholders and Related Party Transactions—Related Party Transactions—Private Placement”). As ofMarch 1, 2019, PWM held approximately 16.1% of our outstanding share capital. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 49 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In connection with our share issuance to PWM, we entered into an investor rights agreement with PWM (the “PWM Investor Rights Agreement”) on January1, 2018. Pursuant to the PWM Investor Rights Agreement, we granted certain shelf and piggyback registration rights to PWM. We also granted PWM theright to designate one director to our Board, subject to certain conditions. In addition, the PWM Investor Rights Agreement imposes on PWM certain transferrestrictions for a three-year lockup period and certain investment restrictions for so long as PWM has the right to designate any director to the Board. ThePWM Investor Rights Agreement also requires PWM to, during the lockup period, vote all shares of the Company beneficially owned by PWM in the mannerrecommended by the Board at any of our shareholders meetings. Private Placement On August 24, 2018, we entered into (i) a share purchase agreement with Beachhead Holdings Limited (“Centurium”) and Double Double Holdings Limited(“DD”), which are affiliated with two of our directors, Mr. David Hui Li and Mr. Joseph Chow, (ii) a share purchase agreement with PWM, our largestshareholder with a director representative, Ms. Yue’e Zhang, and (iii) share purchase agreements with two third party investors, for the issuance and sale of3,050,000, 800,000 and 2,000,000, respectively, ordinary shares of the Company at a per share purchase price of $100.90, to raise aggregate gross proceeds ofapproximately $590 million. The transaction was approved by a special committee formed by our board of directors, consisting of two independent directors.On the same date, the Company issued 1,800,000 ordinary shares to Centurium and an aggregate of 2,000,000 ordinary shares to the two third party investors,pursuant to their respective share purchase agreements. On September 4, 2018, DD assigned its rights and obligations under the share purchase agreement toCenturium, and the Company issued 1,250,000 additional ordinary shares to Centurium thereafter. On September 21, 2018, the Company issued 800,000ordinary shares to PWM. In connection with the foregoing share issuances, we entered into investor rights agreements with each of Centurium and the two third party investors onAugust 24, 2018, which impose certain transfer restrictions on such investors, including a two-year lockup of the ordinary shares acquired in this privateplacement, transfer restrictions with respect to our competitors, and voting agreement in accordance with the recommendations of the board of directors at ourshareholders’ meetings. We also granted certain shelf and piggyback registration rights to Centurium and the two third party investors. In addition, wegranted Centurium the right to designate one director to our board of directors, subject to certain conditions. In connection with the issuance of the 800,000 ordinary shares to PWM, we waived certain transfer restrictions under the PWM Investor Rights Agreement sothat PWM would be permitted to (i) pledge 3,162,854 ordinary shares to secure a margin loan from a third-party bank mainly for the purpose of payment of itssubscription price, and (ii) pledge or sell up to 897,989 additional ordinary shares mainly for the purposes of payment of the interests, fees and expenses,and/or cure of any collateral shortfall, under the margin loan. If PWM proposes to sell any of our ordinary shares covered by the waiver, we have a right offirst offer to purchase or designate another party to purchase all or a portion of such ordinary shares at the closing price of the ordinary shares on the lasttrading day prior to the date when PWM delivers a notice of the proposed sale. Prepayment for Investment in Beijing Taijieweiye Technology Co., Ltd. (“TJWY Medical”) On November 28, 2018, we entered into a share transfer agreement with Smart Step Investments Limited (“Smart Step”), the then largest shareholder of TJWYMedical, pursuant to which we purchased approximately 11.55% of the equity interests in TJWY Medical from Smart Step for a cash consideration ofUS$10,812,893. Pursuant to the share transfer agreement, we have the right to request Smart Step to redeem full or part of the equity interests in TJWYtransferred at the original purchase price plus 6% compound interest rate per annum. Such right can be exercised by us within 6 months from the thirdanniversary of the closing date of the transaction. The transaction was completed on January 23, 2019. TJWY Medical is a manufacturer of interventionalproducts. The ultimate beneficial owner of Smart Step is the mother of Ms. Yue’e Zhang, one of our directors. The audit committee, which consists solely ofindependent directors who have no personal interest in the transaction, approved the transaction. Equity Awards See “Item 6.B. Directors, Senior Management and Employees—Compensation—Employees’ Share Incentive Plan.” Employment Agreements See “Item 6.B. Directors, Senior Management and Employees—Compensation—Employment Agreements.” C. Interests of Experts and Counsel Not applicable. ITEM 8. FINANCIAL INFORMATION A.Consolidated Statements and Other Financial Information The full text of our audited consolidated financial statements as of December 31, 2018, 2017 and 2016 begins on page F-1 of this report. Legal Proceedings PRC Lawsuit -Dispute with an Individual over a Due-on-demand Loan of Guizhou Taibang In June 2017, an individual brought a lawsuit against Guizhou Taibang and Guizhou Eakan Investing Corp. (“Guizhou Eakan”), an entity affiliated with oneof Guizhou Taibang’s former noncontrolling shareholders, requesting repayment of RMB14.56 million (approximately $2.1 million) and related fundpossession cost amounting to approximately RMB37.1 million (approximately $5.4 million). The plaintiff alleged that he entered into an agreement withGuizhou Eakan in May 2007, according to which he provided RMB14.56 million for Guizhou Eakan to satisfy Guizhou Taibang’s loan request. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 50 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. On February 28, 2018, the trial was set in Shanghai Pudong New Area People’s Court. In March 2018, the court dismissed the trial for lack of jurisdiction andthen transferred the trial to Shanghai No.1 Intermediate People's Court (“No.1 Court”). In January 2019, the No.1 Court held the trial and as of reporting datethe ruling is still pending. We do not expect the plaintiff to prevail in this trial, but we cannot assure that the final outcome will be in favor of Guizhou Taibang. As of December 31,2018, Guizhou Taibang has maintained RMB14.56 million (approximately $2.1 million) payable to Guizhou Eakan on its balance sheet. - Dispute with an Individual over Capital Injection into Guizhou Taibang In January 2019, another individual who claimed to be a strategic investor of Guizhou Taibang brought a lawsuit against Guizhou Taibang, requesting toregister her alleged ownership interest in Guizhou Taibang with the local Administration for Market Regulation (“AMR”, formerly known as theAdministration of Industry and Commerce). The plaintiff alleged that she entered into an Equity Purchase Agreement with Guizhou Taibang in May 2007,according to which she paid RMB11.2 million (approximately $1.6 million) to Guizhou Taibang in exchange for approximately 4.71% of GuizhouTaibang’s equity interests. The plaintiff and Guizhou Taibang are scheduled to exchange evidence on March 20, 2019. We do not expect the plaintiff to prevail in this trial, but wecannot assure that the final outcome will be in favor of Guizhou Taibang. Cayman Lawsuit On August 27, 2018, our former Chairman and CEO Mr. David (Xiaoying) Gao commenced a proceeding against us in the Grand Court of the Cayman Islands(the “Court”), principally seeking (a) a declaration that the private placement that was announced by us on August 24, 2018 was invalid and void, (b) anorder requiring us to reverse and/or rescind any transactions carried out pursuant to the private placement, and (c) an injunction to prevent further shares frombeing issued by us to the entities participating in the private placement. The private placement was completed on September 21, 2018. On October 5, 2018,we made an application to the Court for dismissal of Mr. Gao’s lawsuit on the ground, among others, that Mr. Gao lacked standing to pursue the claims. OnDecember 13, 2018, the Court granted our application and dismissed Mr. Gao’s lawsuit. On December 21, 2018, the Court granted Mr. Gao leave to appeal itsDecember 13, 2018 order. Pursuant to the Cayman Islands Court of Appeal Rules, Mr. Gao was required to lodge a Notice of Appeal within 14 days of beinggranted leave to appeal. As of February 25, 2019, the Court of Appeal had no record of a Notice of Appeal relating to this case, and as of the date of thisreport, the Company has not been served with a Notice of Appeal or any further documents relating to this litigation. Dividend Policy We have never declared dividends or paid cash dividends. Any future decisions regarding dividends will be made by our board of directors. We currentlyintend to retain and use substantially all future earnings for the development and expansion of our business and do not anticipate paying any cash dividendsin the foreseeable future. Our board of directors has complete discretion on whether to pay dividends. Even if our board of directors decides to pay dividends,the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition,contractual restrictions and other factors that the board of directors may deem relevant. B.Significant Changes Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financialstatements included in this annual report. ITEM 9. THE OFFER AND LISTING A. Offer and Listing Details Our ordinary shares are traded on the Nasdaq Global Select Market under the symbol “CBPO”. B. Plan of Distribution Not applicable. C. Markets Our ordinary shares are traded on the Nasdaq Global Select Market under the symbol “CBPO”. D. Selling Shareholders Not applicable. E. Dilution Not applicable. F. Expenses of the Issue Not applicable. 51 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ITEM 10. ADDITIONAL INFORMATION A. Share Capital Not applicable. B. Memorandum and Articles of Association. We are an exempted company incorporated under the laws of the Cayman Islands and our affairs are governed by our memorandum and articles ofassociation, as amended and restated from time to time, and the Companies Law (2016 Revision) of the Cayman Islands (the “Companies Law”) and thecommon law of the Cayman Islands. Registered Office and Objects Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman,KY1-1104, Cayman Islands, or at such other location within the Cayman Islands as the Board may from time to time decide. The objects for which ourCompany is established are unrestricted and we have full power and authority to carry out any object not prohibited by the Companies Law, as amended fromtime to time, or any other law of the Cayman Islands. Board of Directors Our Board currently consists of seven directors. Our Board may exercise all the powers of the Company to borrow money, to mortgage or charge itsundertaking, property and uncalled capital, or any part thereof, and to issue debentures, debenture stock or other securities whether outright or as security forany debt, liability or obligation of the Company or of any third party. A director may vote with respect to any contract or transaction in which he or she isinterested as long as he or she has made a declaration of the nature of such interest. A director is not required to hold any shares in the Company by way ofqualification, and there is no requirement for a director to retire at any age limit. We have a Compensation Committee that assists the Board in reviewing and approving the compensation structure and form of compensation of our directorsand executive officers. Members of the Compensation Committee are not prohibited from direct involvement in determining their own compensation. Ourchief executive officer may not be present at any committee meeting during which his compensation is deliberated. For details of our board committees, see “Item 6.C. Directors, Senior Management and Employees—Board Practices.” Ordinary Shares General. All of our outstanding ordinary shares are fully paid and non-assessable. Our ordinary shares are issued in registered form, and are issued whenentered in our register of members. Our shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares. Dividends. The holders of our ordinary shares are entitled to such dividends as may be declared by our Board, subject to the Companies Law and ourmemorandum and articles of association, as amended and restated from time to time. Under Cayman Islands law, dividends may be declared and paid only outof funds legally available therefor, namely out of either profit or share premium account, provided that in no circumstances may the Company pay a dividendif this would result in it being unable to pay its debts as they fall due in the ordinary course of business. Voting Rights. Each holder of ordinary shares is entitled to one vote on all matters upon which the ordinary shares are entitled to vote on a show of hands or,on a poll, each holder is entitled to have one vote for each share registered in his name on the register of members. Voting at any meeting of shareholders isby show of hands unless a poll is demanded. A poll may be demanded by the chairman of the Board or by any one or more shareholders holding at least one-tenth of the votes attaching to the issued and outstanding ordinary shares in the Company entitled to vote at general meetings, present in person or by proxy. A quorum required for a general meeting of shareholders consists of one or more shareholders who hold in aggregate at least one-third of the votes attachingto the issued and outstanding ordinary shares in the Company entitled to vote at general meetings, present in person or by proxy or, if a corporation or othernon-natural person, by its duly authorized representative. A general meeting may be convened by the Board on its own initiative or upon a request to thedirectors by shareholders holding in aggregate at least 25 per cent. in par value of our issued shares that carry the right to vote at general meetings. Anextraordinary general meeting may also be called by the Chairman of the Board or the President of the Company. Advance notice of at least 10 days isrequired for the convening of our annual general meeting and other shareholders meetings. An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast bythose shareholders entitled to vote who are present in person or by proxy in a general meeting, while a special resolution requires the affirmative vote of noless than two-thirds of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy in a generalmeeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of theCompany, as permitted by the Companies Law and our memorandum and articles of association. A special resolution will be required for important matterssuch as change of name or making changes to the memorandum and articles of association of the Company. Liquidation. On a winding up of the Company, if the assets available for distribution among its shareholders shall be more than sufficient to repay the wholeof the share capital at the commencement of the winding up, the surplus will be distributed among its shareholders in proportion to the par value of the sharesheld by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all moniespayable to the Company for unpaid calls or otherwise. If the Company’s assets available for distribution are insufficient to repay all of the paid-up capital, theassets will be distributed so that the losses are borne by its shareholders in proportion to the par value of the shares held by them. 52 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Calls on Ordinary Shares and Forfeiture of Ordinary Shares. Our Board may from time to time make calls upon shareholders for any amounts unpaid ontheir ordinary shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The ordinary shares that have been calledupon and remain unpaid are subject to forfeiture. Redemption, Repurchase and Surrender of Ordinary Shares. The Company may issue shares on terms that are subject to redemption, at the Company’soption or at the option of the holders, on such terms and in such manner as may be determined before the issue of such shares, by the Board or by a specialresolution of the shareholders of the Company. The Company may also repurchase any of its shares, provided that the manner and terms of such purchasehave been agreed between the Board and the relevant shareholder or are otherwise authorized by its memorandum and articles of association. Under theCompanies Law, the redemption or repurchase of any share may be paid out of the Company’s profits or out of the proceeds of a fresh issue of shares made forthe purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if the Company can,immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Law no such sharemay be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) ifthe Company has commenced liquidation. In addition, the Company may accept the surrender of any fully paid share for no consideration. Variations of Rights of Shares. All or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Law, be variedeither with the written consent of the holders of not less than two-thirds of the issued shares of that class or with the sanction of a special resolution passed ata general meeting of the holders of the shares of that class. Changes in Capital. The Company may from time to time by ordinary resolution: ·increase its share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe; ·consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares; ·convert all or any of its paid up shares into stock and reconvert that stock into paid up shares of any denomination; ·sub-divide its existing shares, or any of them into shares of a smaller amount that is fixed by the memorandum and articles of association; and ·cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish theamount of its share capital by the amount of the shares so cancelled. Subject to Companies Law and confirmation by the Grand Court of the Cayman Islands on an application by the Company for an order confirming suchreduction, the Company may by special resolution reduce its share capital and any capital redemption reserve in any manner authorized by law. Board’s Power to Issue Shares. Our memorandum and articles of association authorize the Board to issue additional ordinary shares from time to time as theBoard shall determine, to the extent of available authorized but unissued shares. Our memorandum and articles of association authorize the Board to establish from time to time one or more series of preferred shares and to determine, withrespect to any series of preferred shares, the terms and rights of that series, including: ·the designation of the series; ·the number of shares of the series; ·the dividend rights, dividend rates, conversion rights, voting rights; and ·the rights and terms of redemption and liquidation preferences. The Board may issue preferred shares without action by the shareholders to the extent authorized but unissued. In addition, the issuance of preferred sharesmay be used as an anti-takeover device without further action on the part of the shareholders. Issuance of these shares may dilute the voting power of holdersof ordinary shares. Preferred Shares Rights Plan Each ordinary share includes one right, which we refer to as a Right, that entitles the holder to purchase from us a unit consisting of one-thousandth of a shareof the Company’s Series A Participating Preferred Stock, par value $0.0001 per share, or the Preferred Stock, at an exercise price of $550.00 per one one-thousandth of a Preferred Share, or the Exercise Price, subject to specified adjustments. The Rights were issued pursuant to a preferred shares rights agreementdated February 22, 2017, as amended and restated on July 28, 2017 and as further amended on February 20, 2019 (the “Rights Agreement”), and SecuritiesTransfer Corporation is the rights agent under the assigned Rights agreement, or the Rights Agent. Until a Right is exercised, the holder of a Right will haveno rights to vote or receive dividends or any other shareholder rights. 53 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Rights may have anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire us without the approvalof our Board. As a result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire us. Because our Board canapprove a redemption of the Rights for a permitted offer, the Rights should not interfere with a merger or other business combination approved by our Board. The Rights are not immediately exercisable and will become exercisable only upon the occurrence of certain events. In particular: ·if a person or group acquires 15% or more of our ordinary shares (including through derivatives), then the Rights will become exercisable and eachRight will entitle its holder (except the acquiring person or group) to purchase, at the Exercise Price, a number of our ordinary shares having a then-current market value of twice the Exercise Price; ·if after a person or group acquires 15% or more of our ordinary shares, we merge into another company, an acquiring entity merges into us or we sellor transfer more than 50% of our assets, cash flow or earning power, then each Right will entitle its holder (except the acquiring person or group) topurchase, for the Exercise Price, a number of shares of common stock of the person engaging in the transaction having a then-current market value oftwice the Exercise Price; or ·after a person or group acquires 15% or more of our ordinary shares, the Board may, at its option, exchange the Rights (except for Rights held by theacquiring person or group), in whole or in part, for ordinary shares at an exchange ratio of one ordinary share per Right (subject to adjustment). The following is a more detailed summary of the terms of the Rights Agreement. Distribution and Transfer of Rights; Rights Certificates The Board has declared a dividend of one Right for each outstanding Ordinary Share. Prior to the Distribution Date referred to below: ·the Rights will be evidenced by and trade with the certificates for the Ordinary Shares (or, with respect to any uncertificated Ordinary Sharesregistered in book entry form, by notation in book entry), together with a copy of this summary of Rights, and no separate rights certificates will bedistributed; ·new Ordinary Shares certificates issued after the Record Date will contain a legend incorporating the Rights Agreement by reference (foruncertificated Ordinary Shares registered in book entry form, this legend will be contained in a notation in book entry); and ·the surrender for transfer of any certificates for Ordinary Shares (or the surrender for transfer of any uncertificated Ordinary Shares registered in bookentry form) will also constitute the transfer of the Rights associated with such Ordinary Shares. Rights will accompany any new Ordinary Shares that are issued after the Record Date. Distribution Date Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the Ordinary Shares and become exercisable following (i) the10th business day (or such later date as may be determined by the Board) after the public announcement that an Acquiring Person has acquired beneficialownership of 15% or more of the Ordinary Shares or (ii) the 10th business day (or such later date as may be determined by the Board) after a person or groupannounces a tender or exchange offer that would result in ownership by a person or group of 15% or more of the Ordinary Shares. For purposes of the RightsAgreement, beneficial ownership is defined to include the ownership of derivative securities. “Acquiring Person” means a person or group of affiliated or associated persons who has acquired beneficial ownership of 15% or more of the Ordinary Shares;provided, however, no person who, at the time of the adoption of the Rights Agreement, beneficially owns 15% or more of the Ordinary Shares shall bedeemed to be an Acquiring Person (i.e. a shareholder’s existing ownership of the Ordinary Shares will be grandfathered), unless and until such person acquiresbeneficial ownership of additional 2% or more of the Ordinary Shares without the pre-approval of the Board. The date on which the Rights separate from the Ordinary Shares and become exercisable is referred to as the “Distribution Date.” After the Distribution Date, the Company will mail Rights certificates to the Company’s shareholders as of the close of business on the Distribution Date andthe Rights will become transferable apart from the Ordinary Shares. Thereafter, such Rights certificates alone will represent the Rights. Preferred Shares Purchasable Upon Exercise of Rights After the Distribution Date, each Right will entitle the holder to purchase, for the Exercise Price, one one-thousandth of a Preferred Share having economicand other terms similar to that of one Ordinary Share. This portion of a Preferred Share is intended to give the shareholder approximately the same dividend,voting and liquidation rights as would one Ordinary Share, and should approximate the value of one Ordinary Share. More specifically, each one one-thousandth of a Preferred Share, if issued, will: ·not be redeemable; ·entitle holders to quarterly dividend payments of $0.001 per share, or an amount equal to the dividend paid on one Ordinary Share, whichever isgreater; 54 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·entitle holders upon liquidation either to receive $1 per share or an amount equal to the payment made on one Ordinary Share, whichever is greater; ·have the same voting power as one Ordinary Share; and ·entitle holders to a per share payment equal to the payment made on one Ordinary Share, if the Ordinary Shares are exchanged via merger,consolidation or a similar transaction. Flip-In Trigger If an Acquiring Person obtains beneficial ownership of 15% or more of the Ordinary Shares, then each Right will entitle the holder thereof to purchase, for theExercise Price, a number of Ordinary Shares (or, in certain circumstances, cash, property or other securities of the Company) having a then-current marketvalue of twice the Exercise Price. However, the Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are nolonger redeemable by the Company, as further described below. Following the occurrence of an event set forth in preceding paragraph, all Rights that are or, under certain circumstances specified in the Rights Agreement,were beneficially owned by an Acquiring Person or certain of its transferees will be null and void. Flip-Over Trigger If, after an Acquiring Person obtains 15% or more of the Ordinary Shares, (i) the Company merges into another entity, (ii) an acquiring entity merges into theCompany or (iii) the Company sells or transfers more than 50% of its assets, cash flow or earning power, then each Right (except for Rights that havepreviously been voided as set forth above) will entitle the holder thereof to purchase, for the Exercise Price, a number of shares of common stock of the personengaging in the transaction having a then-current market value of twice the Exercise Price. Exchange Provision At any time after the date on which an Acquiring Person beneficially owns 15% or more of the Ordinary Shares, the Board may, at its option, exchange theRights (except for Rights that have previously been voided as set forth above), in whole or in part, for Ordinary Shares at an exchange ratio of one OrdinaryShare per Right (subject to adjustment). In certain circumstances, the Company may elect to exchange the Rights for cash or other securities of the Companyhaving a value approximately equal to one Ordinary Share. Redemption of the Rights The Rights will be redeemable at the Company’s option for $0.001 per Right (payable in cash, Ordinary Shares or other consideration deemed appropriate bythe Board) at any time on or prior to the 10th business day (or such later date as may be determined by the Board) after the public announcement that anAcquiring Person has acquired beneficial ownership of 15% or more of the Ordinary Shares. Immediately upon the action of the Board ordering redemption,the Rights will terminate and the only right of the holders of the Rights will be to receive the $0.001 redemption price. The redemption price will be adjustedif the Company undertakes a share dividend or a share split. Expiration of the Rights The Rights expire on the earliest of (i) 5:00 p.m., New York City time, February 22, 2021 or (ii) the redemption or exchange of the Rights as described above. Amendment of Terms of Rights Agreement and Rights The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the holders of the Rights on or prior to theDistribution Date. Thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the holders of Rights in order to cureany ambiguities, to shorten or lengthen any time period pursuant to the Rights Agreement or to make changes that do not adversely affect the interests ofholders of the Rights. Voting Rights; Other Shareholder Rights The Rights will not have any voting rights. Until a Right is exercised, the holder thereof, as such, will have no separate rights as shareholder of the Company. Anti-Dilution Provisions The Board may adjust the Exercise Price, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occurfrom a share dividend, a share split or a reclassification of the Preferred Shares or Ordinary Shares. With certain exceptions, no adjustments to the Exercise Price will be made until the cumulative adjustments amount to at least 1% of the Exercise Price. Nofractional Preferred Shares will be issued and, in lieu thereof, an adjustment in cash will be made based on the current market price of the Preferred Shares. Taxes The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights exercisable or uponredemption of the Rights, shareholders may recognize taxable income. 55 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. C. Material Contracts Other than in the ordinary course of business and other than those described elsewhere in this annual report, we have not entered into any material contractduring the two years immediately preceding the date of this annual report. D. Exchange Controls See “Item 4.B. Information on the Company—Business Overview—Business—Regulation—Foreign currency exchange” and “Item 4.B. Information on theCompany—Business Overview—Business—Regulation—Dividend distributions.” E. Taxation The following discussion of the material Cayman Islands, PRC and U.S. federal income tax consequences of an investment in our ordinary shares is basedupon laws and relevant interpretations thereof effective as of the date of this annual report, all of which are subject to change. This discussion does not dealwith all possible tax consequences relating to the investment in our ordinary shares, such as the tax consequences under laws of countries other than theCayman Islands, the PRC and the United States or under state and local tax laws. Cayman Islands Taxation The Cayman Islands government (or any other taxing authority in the Cayman Islands) currently does not levy taxes on individuals or corporations basedupon profits, income, gains or appreciation, and there is no taxation in the Cayman Islands in the nature of inheritance tax or estate duty. There are no othertaxes likely to be material to us levied by the government of the Cayman Islands except for stamp duty which may be applicable on instruments executed in,or brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaty with any country that is applicable to anypayments made to or by us. There are no exchange control regulations or currency restrictions in the Cayman Islands. PRC Taxation Under the Corporate Income Tax Law of the PRC (the “CIT Law”) and its implementation rules, both effective on January 1, 2008, all domestic and foreigninvestment companies will be subject to a uniform enterprise income tax at the rate of 25% and dividends from PRC enterprises to their foreign shareholderswill be subject to a withholding tax at a rate of 10% if the foreign investors are considered as non-resident enterprises without any establishment or placewithin the PRC or if the dividends payable have no connection with the establishment or place of the foreign investors within the PRC, unless any suchforeign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a lower withholding tax rate. In accordance with Caishui (2008)No. 1 issued by the Ministry of Finance, or MOF, and SAT on February 22, 2008, the accumulative undistributed profits of foreign investment companiesgenerated before January 1, 2008, and distributed to foreign investors after year 2008, shall be exempt from withholding tax. The CIT Law has introduced the concept of “resident enterprises” and corresponding tax liability on resident enterprises’ worldwide income, whilst “non-resident enterprises” without any place or establishment in the PRC are required to pay 10% income tax on their passive incomes from sources within Chinaonly. A resident enterprise refers to an enterprise that (i) was established/incorporated within the PRC, or (ii) was established/ incorporated under the laws of aforeign jurisdiction but has its “de facto management body” in the PRC. A non-resident enterprise refers to an enterprise which was established/incorporatedunder the laws of a foreign jurisdiction and does not have its “de facto management body” in the PRC, but has an establishment or place in the PRC, or hasChina-sourced income even though it does not have any establishment or place in the PRC. Under the implementation rules of the CIT Law, “de facto management body” is defined as an organization that has material and overall management andcontrol over the business, personnel, accounts and properties of an enterprise. In April 2009, the SAT issued a Notice on Issues Relating to Determination ofPRC-Controlled Offshore Enterprises as PRC Resident Enterprises Based on “De Facto Management Body” Test, or SAT Circular No. 82, under which, anoffshore enterprise controlled by a PRC enterprise or a PRC enterprise group will be characterized as a “resident enterprise” due to the fact that its “de factomanagement body” is located within the PRC, if all of the following conditions are met at the same time: (i) the senior management personnel responsible forits daily operations and the place where the senior management departments discharge their responsibilities are located primarily in the PRC, (ii) its financeand human resources related decisions are made by or are subject to the approval of institutions or personnel located in the PRC, (iii) its major assets, booksand records, company seals and minutes of its board of directors and shareholder meetings are located or kept in the PRC, and (iv) senior managementpersonnel or 50% or more of the members of its board of directors with voting power of the enterprise reside in the PRC. SAT Circular No. 82 further specifiesthat the principle of “substance over form” shall be adopted in determining whether the “de facto management body” is located within China. We currently are not treated as a PRC resident enterprise by the Chinese tax authority and as a result, we have not withheld PRC income taxes from ourforeign investors and as a non-resident enterprise, we are subject to PRC withholding tax if we receive dividends directly from our PRC subsidiaries paid bythem using funds out of their profits generated on and after January 1, 2008. Nevertheless, a significant portion of our operations are currently based in the PRC. Moreover, a significant portion of our management team, who are incharge of finance and human resources related decisions, perform their duties mainly in the PRC, and over 50% of our board members habitually reside in thePRC. Our main properties, accounting books and records, company seals and minutes of board meetings are maintained in China. However, the rules regarding the determination of the “de facto management body” are relatively new and whether such rules may apply to us is unclear. Dueto lack of further written clarification by the SAT, there is still a uncertainty around the interpretation of each of the four conditions as specified in SATCircular No. 82 and the principle of “substance over form” and the implementation of SAT Circular No. 82 by Chinese tax authorities in practice. It alsoremains unclear what percentage of shares of an offshore enterprise must be held by a PRC entity or group in order for the offshore enterprise to be deemed asan offshore enterprise controlled by a PRC enterprise or a PRC enterprise group, and whether shares held by PRC resident individuals are counted pursuant toSAT Circular No. 82. 56 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Due to the lack of clear guidance on the determination of our tax residency under the CIT Law, it remains unclear whether the PRC tax authorities will treatus as a PRC resident enterprise. As a result, we cannot express an opinion as to the likelihood that we will be subject to the tax applicable to residententerprises or non-resident enterprises under the CIT Law. If we are treated as a PRC resident enterprise, we will be subject to PRC tax on our worldwideincome at the 25% uniform tax rate, but the dividends distributed from our subsidiaries that are or deemed to be PRC resident enterprises should be tax-exempt income. In addition, if we are considered a PRC resident enterprise, the dividends paid by us to the non-PRC shareholders may be regarded as incomefrom sources within the PRC pursuant to SAT Circular No. 82, and therefore the non-PRC institutional shareholders may be subject to a 10% withholding tax,and the non-PRC individual shareholders may be subject to a 20% withholding tax unless they are able to claim a lower tax rate pursuant to applicable taxtreaties. If the non-PRC shareholders are U.S. residents that are eligible for PRC-US Tax Treaty benefits, the application of those benefits to the withholdingtax is unclear. Furthermore, if we are treated as a PRC resident enterprise, there is a possibility that the capital gains realized by our non-PRC shareholders from the transferof their shares may be regarded as income from sources within the PRC for PRC tax purposes. If such capital gains are taxed in China, the applicable incometax rate would be 10% for non-PRC institutional shareholders, and 20% for non-PRC individual shareholders. If the non-PRC shareholders are U.S. residentsthat are eligible for PRC-US Tax Treaty benefits, whether capital gains should be taxed in China is unclear. Pursuant to Paragraph 5 of Article 12 of the PRC-US Tax Treaty, gains from the alienation of shares of a company which is a PRC resident other than thosementioned in paragraph 4 (which refers to shares of a company the property of which consists principally of real property in the PRC) and representing aparticipation of at least 25% may be taxed in China. Paragraph 6 of Article 12 of the PRC-US Tax Treaty further specifies that “[G]ains derived by a residentof a Contracting State from the alienation of any property other than that referred to in paragraphs 1 through 5 and arising in the other Contracting State maybe taxed in that other Contracting State.” By virtue of this provision, the capital gains realized by U.S. residents may be taxed in the PRC if the capital gainsare considered as “arising in” the PRC. Under the CIT Law and its implementing rules, the capital gains from transfer of shares may be considered as “arisingin” the PRC if the enterprise whose shares are transferred is “located in” China. If we are considered a PRC resident enterprise, and if the Chinese taxauthorities take the position that a PRC resident enterprise is deemed to be located in China, the capital gains realized by the U.S. residents from transfer oftheir shares may be taxed in the PRC depending on how the PRC-US Tax Treaty is interpreted and implemented by the Chinese tax authorities. United States Taxation The following is a discussion of material U.S. federal income tax consequences to U.S. Holders, as defined below, of owning and disposing of our ordinaryshares. It does not purport to be a comprehensive description of all tax considerations that may be relevant to a particular investor’s decision to own ourordinary shares. This discussion applies only to U.S. Holders that own our ordinary shares as capital assets for U.S. federal income tax purposes. In addition, itdoes not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including alternative minimum taxconsequences, any aspect of the Medicare contribution tax on “net investment income” and tax consequences applicable to U.S. Holders subject to otherspecial rules, such as, but not limited to: ·certain financial institutions; ·dealers or traders in securities who use a mark-to-market method of tax accounting; ·persons holding our ordinary shares as part of a straddle, conversion transaction or integrated transaction or persons entering into a constructive salewith respect to our ordinary shares; ·persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar; ·entities classified as partnerships or other pass-through entities for U.S. federal income tax purposes; ·tax-exempt entities, “individual retirement accounts” and “Roth IRAs”; ·persons who acquired our ordinary shares pursuant to the exercise of an employee stock option or otherwise as compensation; or ·persons holding our ordinary shares in connection with a trade or business conducted outside of the United States. If an entity that is classified as a partnership for U.S. federal income tax purposes holds our ordinary shares, the U.S. federal income tax treatment of a partnerwill generally depend on the status of the partner and the activities of the partnership. Partnerships holding our ordinary shares, and partners in suchpartnerships, should consult their tax advisers as to the U.S. federal income tax consequences of owning and disposing of our ordinary shares. This discussion is based on the Code, administrative pronouncements, judicial decisions, and final, temporary and proposed Treasury regulations, all as ofthe date hereof, any of which is subject to change, possibly with retroactive effect. Pursuant to Section 7874 of the Code, we are treated as a U.S. corporation for U.S. federal income tax purposes and the discussion herein is based on thistreatment. For purposes of this discussion, a “U.S. Holder” is a beneficial owner of our ordinary shares who for U.S. federal income tax purposes is: ·an individual citizen or resident of the United States; ·a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the Districtof Columbia; or 57 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. U.S. Holders should consult their own tax advisers concerning the U.S. federal, state, local and foreign tax consequences of acquiring, owning and disposingof our ordinary shares in their particular circumstances. Taxation of Distributions. Distributions paid on our ordinary shares, other than certain pro rata distributions of our ordinary shares, will be treated asdividends to the extent paid out of our current or accumulated earnings and profits and will be includable in a U.S. Holder’s income and taxable as ordinarydividend income when received. If a distribution exceeds our current and accumulated earnings and profits, the excess will be first treated as a tax-free returnof capital, to the extent of the U.S. Holder’s tax basis in the ordinary shares. Any remaining excess will be treated as gain from the sale or other taxabledisposition of the ordinary shares. Dividends received by a non-corporate U.S. Holder may be eligible to be taxed at reduced rates if certain holding periodand other applicable requirements are met. Dividends received by a corporate U.S. Holder may be eligible for the dividends-received deduction if certainholding period requirements and other applicable requirements are met. Dividends will be treated as U.S.-source for U.S. federal income tax purposes. As described in “Item 10.E. Taxation—PRC Taxation,” if we were deemed to bea PRC resident enterprise for PRC tax purposes, dividends paid with respect to our ordinary shares might be subject to PRC withholding taxes. For U.S.federal income tax purposes, the amount of a dividend would include any amounts withheld by us in respect of PRC taxes. U.S. Holders should consult theirtax advisers as to whether the rate of any such PRC taxes may be reduced under the provisions of the U.S.-PRC income tax treaty and the creditability of suchPRC taxes in their particular circumstances. Sale or Other Disposition of Our Ordinary Shares. Upon the sale or other taxable disposition of our ordinary shares, a U.S. Holder will recognize gain or loss equal to the difference between the amount realizedon the sale or other taxable disposition and its tax basis in the ordinary shares. Gain or loss realized on the sale or other disposition of the ordinary shares willbe capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder owned the ordinary shares for more than one year. Long-term capital gainsrecognized by non-corporate taxpayers are currently subject to reduced tax rates. The deductibility of capital losses is subject to limitations. As described in “Item 10.E. Taxation—PRC Taxation,” if we were deemed to be a PRC resident enterprise for PRC tax purposes, gains from dispositions ofour ordinary shares might be subject to PRC tax. In that case, a U.S. Holder’s amount realized would include any amounts paid in respect of PRC taxes.Capital gains realized by a U.S. Holder will give rise to U.S.-source gain for foreign tax credit purposes. U.S. Holders should consult their tax advisers as tothe creditability of such PRC taxes in their particular circumstances. Information Reporting and Backup Withholding. Payments of dividends with respect to our ordinary shares and proceeds from the sale, exchange or redemption of our ordinary shares generally are subject toinformation reporting, and may be subject to backup withholding, unless (1) the U.S. Holder is a corporation or other exempt recipient or (2) in the case ofbackup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder may be refunded or credited againstthe U.S. Holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the Internal Revenue Service. U.S. Holdersshould consult their tax advisers regarding the effect, if any, of these rules on their ownership and disposition of our ordinary shares. FATCA. Provisions commonly referred to as ‘‘FATCA” impose withholding of 30% on payments of dividends on, and gross proceeds from dispositions of,our ordinary shares that are held through ‘‘foreign financial institutions’’ (which is broadly defined for this purpose and in general includes investmentvehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership byU.S. persons of certain interests in or accounts with those entities) have been satisfied or an exemption applies. However, regulations proposed by the U.S.Treasury Department on December 18, 2018 indicate an intent to eliminate the requirement under FATCA of withholding on proceeds from dispositions(other than amounts treated as interest). The U.S. Treasury Department has indicated that taxpayers may rely on these proposed regulations pending theirfinalization. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. U.S. Holdersshould consult their tax advisers regarding the effect, if any, of the FATCA provisions on their particular circumstances. F. Dividends and Paying Agents Not applicable. G. Statement by Experts Not applicable. H. Documents on Display We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers, and are required to filereports and other information with the SEC. Specifically, we are required to file annually an annual report on Form 20-F within four months after the end ofeach fiscal year, which is December 31. All information filed with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov or inspectedand copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of documents,upon payment of a duplicating fee, by writing to the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing thefurnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. 58 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In accordance with Nasdaq Stock Market Rule 5250(d), we will post this annual report on Form 20-F on our website at www.chinabiologic.com. In addition,we will provide hardcopies of our annual report free of charge to shareholders upon request. I. Subsidiary Information Not applicable. ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Our operations are carried out in the PRC and we are subject to specific considerations and significant risks not typically associated with companies in NorthAmerica and Western Europe. Accordingly, our business, financial condition and results of operations may be influenced by the political, economic and legalenvironment in the PRC, and by the general state of the PRC economy. Our results may be adversely affected by changes in governmental policies withrespect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among otherthings. Interest Rate Risk We are exposed to interest rate risk primarily with respect to our bank deposits. We have not used any derivative financial instruments to manage our interestrate risk exposure. We have not been exposed nor do we anticipate being exposed to material risks due to changes in interest rates. However, our futureinterest expenses may increase due to changes in market interest rates. Based on our cash balance as of December 31, 2018, a one basis point decrease in interest rates would result in approximately a US$8.8 million decrease inour interest income on an annual basis. Our future interest income may fluctuate in line with changes in interest rates. However, the risk associated withfluctuating interest rates is principally confined to our interest-bearing cash deposits, and, therefore, our exposure to interest rate risk is limited. Management monitors the banks’ prime rates in conjunction with our cash requirements to determine the appropriate level of debt balances relative to othersources of funds. We have not entered into any hedging transactions in an effort to reduce our exposure to interest rate risk. Foreign Exchange Risk Substantially, all our consolidated revenues and consolidated costs and majority of expenses are denominated in RMB. All of our assets are denominated inRMB, except certain cash balances. However, our reporting currency is U.S. dollars. As a result, we are exposed to foreign exchange risk as our revenues andresults of operations may be affected by fluctuations in the exchange rate between U.S. dollars and RMB. If RMB depreciates against the U.S. dollars, thevalue of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. Assets and liabilities are translated atexchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated athistorical exchange rates. Any resulting translation adjustments are not included in determining net income but are included in determining othercomprehensive income, a component of shareholders’ equity. An average appreciation (depreciation) of the RMB against the U.S. dollar of 5% wouldincrease (decrease) our comprehensive income by $2.3 million based on our outstanding revenues, costs and expenses denominated in RMB for the yearended December 31, 2018, and assets and liabilities denominated in RMB as of December 31, 2018. As of December 31, 2018, our accumulated othercomprehensive loss was $45.7 million. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk. See“Item 3.D. Key Information—Risk Factors—Risks Relating to Doing Business in China—Restrictions on currency exchange may limit our ability to use ourrevenue effectively.” and “Item 3.D. Key Information—Risk Factors—Risks Relating to Doing Business in China—Fluctuations in exchange rates couldadversely affect our business and the value of our securities.” Account Balances We maintain cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for bankaccounts located in the United States or may exceed Hong Kong Deposit Protection Board insured limits for bank accounts located in Hong Kong or mayexceed the insured limits for bank accounts in China established by the People's Bank of China. Our total cash at banks and deposits, including cash andequivalents, time deposits and short term investment, as of December 31, 2018 and December 31, 2017 amounted to $951.3 million and $241.8 millionrespectively, $3.2 million and $2.6 million of which are covered by insurance, respectively. We have not experienced any losses in such accounts and we donot believe that we are exposed to any significant risks on our cash at banks and deposits. Inflation Inflationary factors such as increases in the cost of our sales and overhead costs may adversely affect our operating results. Although we do not believe thatinflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effecton our ability to maintain current levels of gross profit and selling, general and administrative expenses as a percentage of net sales if the selling prices of ourproducts do not increase with these increased costs. ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES A. Debt Securities Not applicable. 59 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. B. Warrants and Rights Not applicable. C. Other Securities Not applicable. D. American Depositary Shares Not applicable. 60 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART II ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES None. ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS None. ITEM 15. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information thatwould be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’srules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and ChiefFinancial Officer, as appropriate, to allow timely decisions regarding required disclosure. As required by Rule 13a-15(b) promulgated under the Securities Exchange Act, our management, with the participation of our Chief Executive Officer andChief Financial Officer, evaluated the design and operating effectiveness as of December 31, 2018 of our disclosure controls and procedures, as defined inRule 13a-15(e) promulgated under the Securities Exchange Act. Based on this evaluation our Chief Executive Officer and Chief Financial Officer concludedthat, as of December 31, 2018, our disclosure controls and procedures were effective at the reasonable assurance level to enable our company to record,process, summarize and report information required under the SEC’s rules in a timely manner. Management’s Annual Report on Internal Control over Financial Reporting Internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) refers to the process designed by, or under thesupervision of, our Chief Executive Officer, and effected by our board of directors, management and other personnel, to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles. Management is responsible for establishing and maintaining adequate internal control over financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate. Management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2018. As permitted, that evaluation excluded thebusiness operations of TianXinFu which was acquired in 2018. The acquired business operations excluded from our evaluation associated with total assets of$348,885,628 and total revenues of $44,711,325 included in the consolidated financial statements as of and for the year ended December 31, 2018. Theoperations of the acquired business will be included in our 2019 evaluation. In making this evaluation, management used the framework established inInternal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSOframework summarizes each of the components of a company’s internal control system, including the control environment, risk assessment, control activities,information and communication, and monitoring activities. Based on our evaluation we determined that our internal control over financial reporting waseffective as of December 31, 2018. Our internal control over financial reporting as of December 31, 2018 has been audited by our independent registered public accounting firm as stated intheir report which is included in Part II, Item 9A of this Form 20-F. Report of Independent Registered Public Accounting Firm To the Shareholders and Board of DirectorsChina Biologic Products Holdings, Inc.: Opinion on Internal Control Over Financial Reporting We have audited China Biologic Products Holdings, Inc. and subsidiaries (the “Company”) internal control over financial reporting as of December 31, 2018,based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidatedbalance sheets of the Company as of December 31, 2018 and 2017, and the related consolidated statements of comprehensive income, changes in equity, andcash flows for each of the years in the three-year period ended December 31, 2018 and related notes (collectively, the “consolidated financial statements”),and our report dated March 6, 2019 expressed an unqualified opinion on those consolidated financial statements. 61 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company acquired TianXinFu (Beijing) Medical Appliance Co., Ltd. (“TianXinFu”) during 2018, and management excluded from its assessment of theeffectiveness of the Company’s internal control over financial reporting as of December 31, 2018, TianXinFu’s internal control over financial reportingassociated with total assets of $348,885,628 and total revenues of $44,711,325 included in the consolidated financial statements of the Company as of andfor the year ended December 31, 2018. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internalcontrol over financial reporting of TianXinFu. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Ourresponsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financialreporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate. /s/ KPMG Huazhen LLPBeijing, ChinaMarch 6, 2019 Changes in Internal Controls over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(d) and 15d-15(f)) during the year endedDecember 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT See “Item 6.C. Directors, Senior Management and Employees—Board Practices.” ITEM 16B. CODE OF ETHICS On March 25, 2008, our Board adopted a code of ethics, which applies to all of our directors, officers and employees, including our CEO and CFO. The codeof ethics is designed to deter wrongdoing and to promote: honest and ethical conduct, including the ethical handling of actual or apparent conflicts ofinterest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in reports and documents that we file with,or submit to, the SEC, and in other public communications that we made; compliance with applicable laws, rules and regulations; the prompt internalreporting of violations of the code to the appropriate person or persons; and accountability for adherence to the code. We believe that our reputation is avaluable asset and must continually be guarded by all associated with us so as to earn the trust, confidence and respect of our suppliers, customers andshareholders. Our Board amended the code of ethics on March 11, 2013 and further amended it on March 4, 2019, to update certain administrativeinformation in the code. The code of ethics is maintained on the Company’s website at www.chinabiologic.com. Printed copies of our code of ethics may be obtained, without charge,by contacting the Corporate Secretary, China Biologic Products Holdings, Inc., 18th Floor, Jialong International Building, 19 Chaoyang Park Road,Chaoyang District, Beijing 100125, People’s Republic of China. During the fiscal year ended December 31, 2018, there were no waivers of our code of ethics. 62 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES Aggregate fees billed to the Company by our independent accountant, KPMG Huazhen LLP (“KPMG”), during the last two fiscal years were as follows: 2018 2017 Audit Fees $887,973 $821,635 Audit Related Fees - 146,382 Tax Fees 41,489 44,138 Total $929,462 $1,012,155 Audit fees paid to KPMG consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements andaudit of the effectiveness of internal control over financial reporting, and services that are normally provided by our auditors in connection with statutory andregulatory filings or engagements. Audit related fees paid by us to KPMG in 2017 refer to fees incurred for professional services rendered for due diligence pertaining to business combinationof TianXinFu. Tax fees paid by us to KPMG of $41,489 and $44,138 in 2018 and 2017, respectively, were for tax compliance services in the same periods. In accordance with the Audit Committee’s pre-approval policies and procedures described below, in 2018, all audit, audit-related and tax performed byKPMG were approved in advance by the Audit Committee. KPMG was our principal auditor. Pre-Approval Policies and Procedures Under the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our auditors must be approved in advance by our Audit Committee toassure that such services do not impair the auditors’ independence from us. ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES None. ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS None. ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT None. ITEM 16G. CORPORATE GOVERNANCE As a Cayman Islands company listed on Nasdaq, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreignprivate issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, whichis our home country, may differ significantly from the Nasdaq corporate governance listing standards. The Company has elected to follow Cayman Islands home country practice with respect to effecting an acquisition transaction without the requirement toobtain shareholder approval, in lieu of the corporate governance requirements of Nasdaq Listing Rule 5635(a) with respect to shareholder approval. TheCompany has also elected to follow Cayman Islands home country practice regarding the composition of the board of directors in lieu of Nasdaq Listing Rule5605(b) that requires a majority of the board of directors to be comprised of independent directors. Except as set forth above, there are no material differences between our corporate governance practices and those followed by U.S. domestic companies underNasdaq Stock Market Rules. However, if we choose to follow other home country practice in the future, our shareholders may be afforded less protection than they otherwise would underthe Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. See “Item 3.D. Key Information—Risk Factors—Risks Relating to OurOrdinary Shares—As a Cayman Islands company, we are permitted to adopt certain home country practices in relation to corporate governance matters thatdiffer significantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoyunder Nasdaq corporate governance listing standards.” ITEM 16H. MINE SAFETY DISCLOSURE Not applicable. 63 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART III. ITEM 17. FINANCIAL STATEMENTS We have elected to provide financial statements pursuant to Item 18. ITEM 18. FINANCIAL STATEMENTS The consolidated financial statements for China Biologic Products Holdings, Inc. and its subsidiaries are included at the end of this annual report. ITEM 19. EXHIBITS Exhibit List The list of exhibits in the Exhibit Index to this Report is incorporated herein by reference. 64 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT INDEX Exhibit No. Description1.1* Amended and Restated Memorandum and Articles of Association of China Biologic Products Holdings, Inc. 2.1 Specimen Ordinary Share Certificate of China Biologic Products Holdings, Inc. (incorporated by reference to Exhibit 4.2 of the Form 8-Afiled by the registrant on August 3, 2017) 2.2 Amended and Restated Preferred Shares Rights Agreement, dated as of July 31, 2017, by and between China Biologic Products Holdings,Inc. and Securities Transfer Corporation (incorporated by reference to Exhibit 4.1 of the Form 8-A filed by the registrant on August 3,2017) 2.3 Investor Rights Agreement, dated as of January 1, 2018, by and between China Biologic Products Holdings, Inc. and PW Medtech GroupLimited (incorporated by reference to Exhibit 99.2 of the Form 6-K furnished to the SEC by the registrant on January 3, 2018) 2.4 Investor Rights Agreement, dated as of August 24, 2018, by and between China Biologic Products Holdings, Inc. and Beachhead HoldingsLimited (incorporated by reference to Exhibit 99.5 of the Form 6-K furnished to the SEC by the registrant on August 27, 2018) 2.5 Investor Rights Agreement, dated as of August 24, 2018, by and between China Biologic Products Holdings, Inc. and CITIC Capital MBInvestment Limited (incorporated by reference to Exhibit 99.6 of the Form 6-K furnished to the SEC by the registrant on August 27, 2018) 2.6 Investor Rights Agreement, dated as of August 24, 2018, by and between China Biologic Products Holdings, Inc. and HH China BioHoldings LLC (incorporated by reference to Exhibit 99.7 of the Form 6-K furnished to the SEC by the registrant on August 27, 2018) 2.7 Amendment No. 1 to Amended and Restated Preferred Shares Rights Agreement, dated as of February 20, 2019, by and between ChinaBiologic Products Holdings, Inc. and Securities Transfer Corporation (incorporated by reference to Exhibit 99.1 of the Form 6-K furnishedby the registrant on February 20, 2019) 4.1 China Biologic Products Holdings, Inc. 2008 Equity Incentive Plan (as assumed and amended on July 21, 2017) (incorporated byreference to Exhibit 4.2 of the Post-Effective Amendment No. 1 to Form S-8 filed by the registrant on July 21, 2017) 4.2 Form of Stock Option Award Agreement of China Biologic Products, Inc. (incorporated by reference to Exhibit 10.5 of the current reporton Form 8-K filed by the registrant on May 13, 2008) 4.3 Form of Restricted Stock Award Agreement of China Biologic Products, Inc. (incorporated by reference to Exhibit 3.3 of the quarterlyreport on Form 10-Q filed by the registrant on August 6, 2013) 4.4 Group Secondment Agreement, dated October 28, 2002, between Shandong Taibang and the Shandong Institute (English Translation)(incorporated by reference to Exhibit 10.1 of the registration statement on Form SB-2/A filed by the registrant on December 3, 2007) 4.5 Amended and Restated Joint Venture Agreement, between Logic Express Limited and the Shandong Institute, dated as of March 12, 2006(English Translation) (incorporated by reference to Exhibit 10.2 of the registration statement on Form SB-2 filed by the registrant onSeptember 5, 2007) 4.6 Letter of Intent for Equity Transfer, between Logic Express Limited and the Shandong Institute, dated as of June 10, 2006 (EnglishTranslation) (incorporated by reference to Exhibit 10.3 of the registration statement on Form SB-2 filed by the registrant on September 5,2007) 4.7 Joint Venture and Cooperation Agreement between Shandong Taibang and Shaanxi Power Construction Corporation, dated September 12,2008 (incorporated by reference to Exhibit 10.2 of the current report on Form 8-K filed by the registrant on October 16, 2008) 4.8 Agreement on Equity Transfer, Acquisition, Joint Venture and Cooperation, among Shandong Taibang, Shaanxi Power ConstructionCorporation and Mr. Fan Qingchu, dated September 12, 2008 (incorporated by reference to Exhibit 10.3 of the current report on Form 8-Kfiled by the registrant on October 16, 2008) 4.9 (Shareholder) Agreement among Shandong Taibang, Logic Express Limited and Biological Institute dated September 12, 2008(incorporated by reference to Exhibit 10.4 of the current report on Form 8-K, filed by the registrant on October 16, 2008) 4.10 Equity Transfer Agreement, dated September 26, 2008, among Logic Express Limited, Chongqing Dalin Biologic Technologies Co., Ltd.and certain shareholders of Chongqing Dalin Biologic Technologies Co., Ltd. (incorporated by reference to Exhibit 10.1 of the currentreport on Form 8-K filed by the registrant on October 2, 2008) 4.11 Equity Transfer Agreement, between Shandong Taibang and Mr. Fan Qingchun, dated October 10, 2008 (incorporated by reference toExhibit 10.1 of the current report on Form 8-K filed by the registrant on October 16, 2008) 65 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 4.12 Supplemental Agreement, dated November 3, 2008, among Logic Express Limited, Fan Shaowen, as representative of the shareholders ofChongqing Dalin Biologic Technologies Co., Ltd. and Chongqing Dalin Biologic Technologies Co., Ltd. (English Translation)(incorporated by reference to Exhibit 10.2 of the current report on Form 8-K filed by the registrant on November 7, 2008) 4.13 Second Supplemental Agreement, dated November 14, 2008, among Logic Express Limited, Fan Shaowen as representative of theshareholders of Chongqing Dalin Biologic Technologies Co., Ltd. and Chongqing Dalin Biologic Technologies Co., Ltd. (EnglishTranslation) (incorporated by reference to exhibit 10.3 of the current report on Form 8-K filed by the registrant on November 20, 2008) 4.14 Amended Equity Transfer Agreement, dated December 12, 2008, among Logic Express Limited, Chongqing Dalin Biologic TechnologiesCo., Ltd., and certain shareholders of Chongqing Dalin Biologic Technologies Co., Ltd. (English Translation) (incorporated by referenceto exhibit 10.4 of the current report on Form 8-K filed by the registrant on December 18, 2008) 4.15 Equity Transfer and Entrustment Agreement, dated April 6, 2009, among Logic Express, Shandong Taibang and the Shandong Institute(English Translation) (incorporated by reference to Exhibit 10.6 of the current report on Form 8-K filed by the registrant on April 13, 2009) 4.16 Asset Purchase Agreement, between Xia Jin An Tai Plasma Collection Co., Ltd. and Xia Jin County Plasma Collection Station, dated as ofOctober 20, 2006 (English Translation) (incorporated by reference to Exhibit 10.15 of the registration statement on Form SB-2/A filed bythe registrant on December 3, 2007) 4.17 Asset Purchase Agreement, between Liao Cheng An Tai Plasma Collection Co., Ltd. and Yang Gu County Plasma Collection Station,dated as of November 3, 2006 (English Translation) (incorporated by reference to Exhibit 10.16 of the registration statement on Form SB-2/A filed by the registrant on December 3, 2007) 4.18 Asset Purchase Agreement, between Qi He An Tai Plasma Collection Co., Ltd. and Qi He County Plasma Collection Station, dated as ofNovember 9, 2006 (English Translation) (incorporated by reference to Exhibit 10.14 of the registration statement on Form SB-2/A filed bythe registrant on December 3, 2007) 4.19 Asset Purchase Agreement, between He Ze An Tai Plasma Collection Co., Ltd and Yun Cheng County Plasma Collection Station, dated asof December 15, 2006 (English Translation) (incorporated by reference to Exhibit 10.22 of the registration statement on Form SB-2/A filedby the registrant on December 3, 2007) 4.20 Asset Purchase Agreement, between Zhang Qiu An Tai Plasma Collection Co., Ltd. and Zhang Qiu Plasma Collection Station, dated as ofDecember 31, 2006 (English Translation) (incorporated by reference to Exhibit 10.12 of the registration statement on Form SB-2/A filedby the registrant on December 3, 2007) 4.21 Asset Purchase Agreement, between Guang Xi Huan Jiang Missile Plasma Collection Co., Ltd. and Huan Jiang Maonan AutonomousCounty Plasma Collection Station, dated as of April 24, 2007 (English Translation) (incorporated by reference to Exhibit 10.13 of theregistration statement on Form SB-2/A filed by the registrant on December 3, 2007) 4.22 Asset Purchase Agreement, between Fang Cheng Plasma Collection Co., Ltd. and Fang Cheng Plasma Company, dated as of April 30,2007 (English Translation) (incorporated by reference to Exhibit 10.21 of the registration statement on Form SB-2/A filed by the registranton December 3, 2007) 4.23 Asset Purchase Agreement, between Guang Xi Huan Jiang Missile Plasma Collection Co., Ltd. and Huan Jiang Maonan AutonomousCounty Plasma Collection Station, dated as of April 24, 2007 (English Translation) (incorporated by reference to Exhibit 10.13 of theregistration statement on Form SB-2/A filed by the registrant on December 3, 2007) 4.24 Trademark Licensing Agreement, dated as of February 27, 2007 (English Translation) (incorporated by reference to Exhibit 10.17 of theregistration statement on Form SB-2/A filed by the registrant on December 3, 2007) 4.25 Loan Agreement, dated as of November 30, 2006, among Shandong Taibang and the Shandong Institute and Logic Express (EnglishTranslation) (incorporated by reference to Exhibit 10.18 of the registration statement on Form SB-2/A filed by the registrant on December3, 2007) 4.26 Supplementary Agreement, dated as of September 1, 2007, among Shandong Taibang, the Shandong Institute and Logic Express Limited(English Translation) (incorporated by reference to Exhibit 10.19 of the registration statement on Form SB-2/A filed by the registrant onDecember 3, 2007) 4.27 Form of Director’s Employment Agreement (incorporated by reference to Exhibit 10.8 of the registration statement on Form SB-2 filed bythe registrant on September 5, 2007) 4.28 Form of Independent Director Agreement (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K filed by theregistrant on July 30, 2008) 4.29 Form of Indemnity Agreement (incorporated by reference to Exhibit 10.2 of the current report on Form 8-K filed by the registrant on July30, 2008) 4.30 Form of Guarantee and Pledge Agreement, (incorporated by reference to Exhibit 10.2 of the current report on Form 8-K filed by theregistrant on June 5, 2009). 4.31 Form of Indemnification Agreement, (incorporated by reference to Exhibit 10.3 of the current report on Form 8-K filed by the registrant onJune 5, 2009).Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 66 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 4.32 Cooperation Agreement, among Guizhou Taibang, Xinjiang Deyuan and its controlling shareholder, dated August 28, 2015 (SummaryEnglish Translation) (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K filed by the registrant on September 2,2015) 4.33 Supplemental Agreement, between Guizhou Taibang and Xinjiang Deyuan, dated April 16, 2015 (Summary English Translation)(incorporated by reference to Exhibit 10.2 of the current report on Form 8-K filed by the registrant on April 16, 2015) 4.34 Cooperation Agreement, between Guizhou Taibang and Xinjiang Deyuan, dated September 30, 2014 (Summary English Translation)(incorporated by reference to Exhibit 10.1 of the current report on Form 8-K filed by the registrant on April 16, 2015) 4.35 Registered Equity Purchase Agreement, between Guiyang Dalin Biotechnology Co., Ltd. and Guizhou Eakan Pharmaceutical Co., Ltd.,dated August 21, 2014 (Summary English Translation) (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K filedby the registrant on August 25, 2014) 4.36 Equity Exchange Agreement, between Guiyang Dalin Biotechnology Co., Ltd. and Guizhou Eakan Pharmaceutical Co., Ltd., datedAugust 21, 2014 (Summary English Translation) (incorporated by reference to Exhibit 10.2 of the current report on Form 8-K filed by theregistrant on August 25, 2014) 4.37 Unregistered Equity Purchase Agreement, between Guiyang Dalin Biotechnology Co., Ltd. and Guizhou Eakan Pharmaceutical Co., Ltd.,dated August 21, 2014 (Summary English Translation) (incorporated by reference to Exhibit 10.3 of the current report on Form 8-K filedby the registrant on August 25, 2014) 4.38 Summary English translation of Settlement Agreement among Guizhou Taibang Biological Products Co., Ltd., Guiyang Dalin BiologicTechnologies Co., Ltd., Guizhou Jie’an Company and Shenzhen Yigong Shengda Technology Co., Ltd. dated July 31, 2016 (incorporatedby reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed by the registrant on August 4, 2016) 4.39 Summary English translation of Guarantee Agreement among Guizhou Taibang Biological Products Co., Ltd., Guiyang Dalin BiologicTechnologies Co., Ltd., Guizhou Jie’an Company and Shenzhen Yigong Shengda Technology Co., Ltd. dated July 31, 2016 (incorporatedby reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q filed by the registrant on August 4, 2016) 4.40* Employment Agreement between the Company and Bing Li dated August 13, 2018 4.41* Third Amended and Restated Employment Agreement between the Company and Ming Yang dated August 31, 2018 4.42* Employment Agreement between the Company and Huaming He dated December 3, 2018 4.43 Agreement and Plan of Merger by and between China Biologic Products, Inc. and China Biologic Products Holdings, Inc. dated April 28,2017 (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by the registrant on April 28, 2017) 4.44 Share Exchange Agreement by and between China Biologic Products Holdings, Inc. and PW Medtech Group Limited dated October 12,2017 (incorporated by reference to Exhibit 99.2 of the Form 6-K furnished to the SEC by the registrant on October 13, 2017) 4.45 Amendment No. 1 to the Share Exchange Agreement, dated as of December 29, 2017, by and between China Biologic Products Holdings,Inc. and PW Medtech Group Limited (incorporated by reference to Exhibit 99.1 of the Form 6-K furnished to the SEC by the registrant onDecember 29, 2017) 4.46 Supplemental Agreement to Strategic Cooperation Agreement to Source Raw Plasma dated August 1, 2018 made by and among XinjiangDeyuan, Guizhou Taibang and Lv Xianzhong (Summary English translation) (incorporated by reference to Exhibit 99.2 of the Form 6-Kfurnished to the SEC by the registrant on August 3, 2018) 4.47 Share Purchase Agreement by and among China Biologic Products Holdings, Inc., Beachhead Holdings Limited and Double DoubleHoldings Limited dated as of August 24, 2018 (incorporated by reference to Exhibit 99.1 of the Form 6-K furnished to the SEC by theregistrant on August 27, 2018) 4.48 Share Purchase Agreement by and between China Biologic Products Holdings, Inc. and CITIC Capital MB Investment Limited dated as ofAugust 24, 2018 (incorporated by reference to Exhibit 99.2 of the Form 6-K furnished to the SEC by the registrant on August 27, 2018) 4.49 Share Purchase Agreement by and between China Biologic Products Holdings, Inc. and HH China Bio Holdings LLC dated as of August24, 2018 (incorporated by reference to Exhibit 99.3 of the Form 6-K furnished to the SEC by the registrant on August 27, 2018) 4.50 Share Purchase Agreement by and between China Biologic Products Holdings, Inc. and PW Medtech Group Limited dated as of August24, 2018 (incorporated by reference to Exhibit 99.4 of the Form 6-K furnished to the SEC by the registrant on August 27, 2018) 8.1* Subsidiaries of the registrant 11.1* Code of Ethics 67 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 12.1* Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 12.2* Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 13.1** Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 13.2** Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 15.1* Consent of independent registered public accounting firm 101* Interactive data files pursuant to Rule 405 of Regulation S-T *Filed herewith.** Furnished herewith. 68 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused andauthorized the undersigned to sign this annual report on its behalf. CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. Date: March 6, 2019 By: /s/ Bing Li Name: Bing Li Title: Chief Executive Officer 69Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIES CONTENTS PageReport of Independent Registered Public Accounting Firm F-1Consolidated Balance Sheets F-2Consolidated Statements of Comprehensive Income F-3Consolidated Statements of Changes in Equity F-4Consolidated Statements of Cash Flows F-5-F-6Notes to Consolidated Financial Statements F-7 - F-32 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Report of Independent Registered Public Accounting Firm To the Shareholders and Board of DirectorsChina Biologic Products Holdings, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of China Biologic Products Holdings, Inc. and subsidiaries (the “Company”) as of December31, 2018 and 2017, the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-yearperiod ended December 31, 2018, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financialstatements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operationsand its cash flows for each of the years in the three-year period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’sinternal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued bythe Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 6, 2019 expressed an unqualified opinion on theeffectiveness of the Company’s internal control over financial reporting. Change in Accounting Principle As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for revenue recognition in 2018 due tothe adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), as amended. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent withrespect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and ExchangeCommission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performingprocedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures thatrespond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating theoverall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. We have served as the Company’s auditor since 2015. /s/ KPMG Huazhen LLPBeijing, ChinaMarch 6, 2019 F-1 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS Note December 31, 2018 December 31, 2017 USD USD ASSETS Current Assets Cash and cash equivalents 338,880,559 219,336,848 Time deposits 537,478,040 22,895,200 Short term investments 76,048,594 - Accounts receivable, net of allowance for doubtful accounts 4 125,115,842 77,267,275 Loan receivable - current 10 - 45,912,000 Inventories 6 243,295,512 209,570,835 Prepayments and other current assets, net of allowance for doubtful accounts 5 36,369,275 18,139,453 Total Current Assets 1,357,187,822 593,121,611 Property, plant and equipment, net 7 178,327,361 166,812,749 Intangible assets, net 8 53,258,871 536,338 Land use rights, net 32,204,342 24,853,163 Equity method investment 15,428,028 14,903,908 Prepayments for investments in equity securities 9 10,812,893 - Loan receivable - non current 10 39,942,591 - Goodwill 3 313,588,803 - Other non-current assets 9,227,970 8,829,648 Total Assets 2,009,978,681 809,057,417 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable 11,404,642 7,548,909 Income tax payable 12 11,010,347 14,258,544 Other payables and accrued expenses 11 99,933,793 75,827,864 Total Current Liabilities 122,348,782 97,635,317 Deferred income 2,824,212 3,476,877 Non-current income tax payable 12 26,899,038 37,067,138 Other liabilities 13,203,485 6,553,088 Total Liabilities 165,275,517 144,732,420 Shareholders’ Equity Ordinary share: par value $0.0001; 100,000,000 shares authorized; 41,616,320 and 29,866,545 shares issued at December 31, 2018 and 2017,respectively; 39,361,616 and 27,611,841 shares outstanding at December 31, 2018 and 2017,respectively 4,162 2,987 Additional paid-in capital 1,189,698,494 140,230,395 Treasury share: 2,254,704 shares at December 31, 2018 and 2017, respectively, at cost (56,425,094) (56,425,094)Retained earnings 634,482,738 506,426,436 Accumulated other comprehensive (losses)/income (45,710,701) 7,957,304 Total equity attributable to China Biologic Products Holdings, Inc. 1,722,049,599 598,192,028 Noncontrolling interest 122,653,565 66,132,969 Total Shareholders’ Equity 1,844,703,164 664,324,997 Commitments and contingencies 17 - - Total Liabilities and Shareholders’ Equity 2,009,978,681 809,057,417 See accompanying notes to Consolidated Financial Statements. F-2 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31, December 31, December 31, Note 2018 2017 2016 USD USD USD Sales 16 466,877,569 370,406,840 341,169,426 Cost of sales 146,787,236 125,517,021 124,034,448 Gross profit 320,090,333 244,889,819 217,134,978 Operating expenses Selling expenses 95,575,830 34,843,935 11,679,242 General and administrative expenses 68,817,340 67,683,667 54,519,122 Research and development expenses 9,524,412 6,503,712 7,021,992 Income from operations 146,172,751 135,858,505 143,914,622 Other income (expenses) Equity in income of an equity method investee 2,368,995 3,509,071 2,519,201 Interest income 13,706,750 7,623,624 7,815,780 Interest expense (338,136) (583,432) (254,471)Loss from disposal of a subsidiary - - (75,891)Other income, net 4,092,935 - - Total other income, net 19,830,544 10,549,263 10,004,619 Income before income tax expense 166,003,295 146,407,768 153,919,241 Income tax expense 12 18,036,180 64,171,809 25,125,820 Net income 147,967,115 82,235,959 128,793,421 Less: Net income attributable to noncontrolling interest 19,910,813 14,292,924 24,014,114 Net income attributable to China Biologic Products Holdings, Inc. 128,056,302 67,943,035 104,779,307 Earnings per share of ordinary share: 18 Basic 3.54 2.40 3.79 Diluted 3.53 2.38 3.74 Weighted average shares used in computation: 18 Basic 35,304,294 27,361,561 26,848,445 Diluted 35,432,959 27,605,623 27,249,144 Net income 147,967,115 82,235,959 128,793,421 Other comprehensive (losses)/income: Foreign currency translation adjustment, net of nil income taxes (60,783,829) 36,861,394 (31,303,262) Comprehensive income 87,183,286 119,097,353 97,490,159 Less: Comprehensive income attributable to noncontrolling interest 12,794,989 17,876,743 19,026,592 Comprehensive income attributable to China Biologic Products Holdings,Inc. 74,388,297 101,220,610 78,463,567 See accompanying notes to Consolidated Financial Statements. F-3 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Accumulated Equity Ordinary share Additional other attributable Number of paid-in Treasury Retained comprehensive to China Biologic Noncontrolling Shares Par value capital stock earnings income (loss) Products Holdings, Inc. interest Total equity USD USD USD USD USD USD USD USD Balance as ofJanuary 1,2016 28,835,053 2,884 105,079,845 (56,425,094) 333,704,094 (18,605) 382,343,124 84,618,675 466,961,799 Net income - - - - 104,779,307 - 104,779,307 24,014,114 128,793,421 Othercomprehensiveloss - - - - - (26,315,740) (26,315,740) (4,987,522) (31,303,262)Dividenddeclared to anoncontrollinginterestshareholder - - - - - - - (10,901,312) (10,901,312)Share-basedcompensation - - 24,405,511 - - - 24,405,511 - 24,405,511 Excess taxbenefits fromstock optionexercises - - 2,299,316 - - - 2,299,316 314,515 2,613,831 Adjustments innoncontrollinginterestresulting fromcapitalinjections - - 513,397 - - - 513,397 (513,397) - Capitalwithdrawal bynoncontrollinginterestshareholders - - (30,397,196) - - 1,014,074 (29,383,122) (33,608,839) (62,991,961)Ordinary shareissued inconnectionwith: - Exercise ofstock options 337,406 34 3,558,762 - - - 3,558,796 - 3,558,796 - Vesting ofrestrictedshares 255,150 25 (25) - - - - - - Balance as ofDecember 31,2016 29,427,609 2,943 105,459,610 (56,425,094) 438,483,401 (25,320,271) 462,200,589 58,936,234 521,136,823 Net income - - - - 67,943,035 - 67,943,035 14,292,924 82,235,959 Othercomprehensiveincome - - - - - 33,277,575 33,277,575 3,583,819 36,861,394 Dividenddeclared to anoncontrollinginterestshareholder - - - - - - - (10,680,008) (10,680,008)Share-basedcompensation - - 33,903,283 - - - 33,903,283 - 33,903,283 Ordinary shareissued inconnectionwith: - Exercise ofstock options 85,242 9 867,537 - - - 867,546 - 867,546 - Vesting ofrestrictedshares 353,694 35 (35) - - - - - - Balance as ofDecember 31,2017 29,866,545 2,987 140,230,395 (56,425,094) 506,426,436 7,957,304 598,192,028 66,132,969 664,324,997 Net income - - - - 128,056,302 - 128,056,302 19,910,813 147,967,115 Othercomprehensiveloss - - - - - (53,668,005) (53,668,005) (7,115,824) (60,783,829)Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Dividenddeclared to anoncontrollinginterestshareholder - - - - - - - (10,145,395) (10,145,395)Share-basedcompensation - - 23,130,570 - - - 23,130,570 - 23,130,570 Issuance ofordinary sharesin privateplacement 5,850,000 585 590,264,415 - - - 590,265,000 - 590,265,000 Issuance ofordinary sharesto PWM inexchange for80% equityinterest ofTianXinFu(Note 3) 5,521,000 552 434,888,618 - - - 434,889,170 53,871,002 488,760,172 Ordinary shareissued inconnectionwith: - Exercise ofstock options 121,945 12 1,184,522 - - - 1,184,534 - 1,184,534 - Vesting ofrestrictedshares 256,830 26 (26) - - - - - - Balance as ofDecember 31,2018 41,616,320 4,162 1,189,698,494 (56,425,094) 634,482,738 (45,710,701) 1,722,049,599 122,653,565 1,844,703,164 See accompanying notes to Consolidated Financial Statements. F-4 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, December 31, December 31, 2018 2017 2016 USD USD USD CASH FLOWS FROM OPERATING ACTIVITIES: Net income 147,967,115 82,235,959 128,793,421 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 13,809,041 11,691,731 11,962,983 Amortization 9,416,310 1,216,959 775,053 Loss on disposal of property, plant and equipment 1,001,000 3,228,845 293,098 Allowance for doubtful accounts - accounts receivable, net 655,148 23,783 123,239 Allowance for doubtful accounts - prepayments and other receivables 96,267 - 65,341 Impairment for other non-current assets 2,671,528 - 1,225,200 Write-down of obsolete inventories - - 256,862 Deferred income tax benefit (4,159,890) (3,252,516) (3,006,541)Share-based compensation 23,130,570 33,903,283 24,405,511 Equity in income of an equity method investee (2,368,995) (3,509,071) (2,519,201)Loss from disposal of a subsidiary - - 75,891 Excess tax benefits from share-based compensation arrangements - - (2,613,831)Change in operating assets and liabilities, net of effect of acquisition of TianXinFu: Accounts receivable (53,879,876) (39,918,939) (10,971,773)Inventories (42,594,485) (42,078,261) (40,077,384)Prepayments and other current assets (9,387,783) (1,777,783) 1,946,800 Accounts payable 8,140,553 977,152 2,966,885 Income tax payable (3,575,544) 6,047,808 6,022,145 Other payables and accrued expenses 23,693,979 16,821,694 4,221,669 Deferred income (504,886) (493,897) (686,757)Non-current income tax payable (10,168,100) 37,067,138 - Net cash provided by operating activities 103,941,952 102,183,885 123,258,611 CASH FLOWS FROM INVESTING ACTIVITIES: Cash acquired from acquisition of TianXinFu 97,702,278 - - Purchase of time deposit (1,871,773,012) (22,669,000) - Proceeds from maturity of time deposit 1,349,949,821 - - Purchase of short term investments (855,074,467) - - Proceeds from maturity of short term investments 767,654,706 - - Payment for property, plant and equipment (31,743,146) (37,504,440) (49,371,318)Payment for intangible assets and land use rights (4,973,244) (786,691) (1,635,891)Refund of payments and deposits related to land use right - - 10,297,893 Proceeds from disposal of property, plant and equipment and land use rights 124,560 64,914 393,019 Loans lent to a third party - - (12,332,718)Proceeds from disposal of a subsidiary - - 128,654 Prepayments for investments in equity securities (10,812,893) - - Net cash used in investing activities (558,945,397) (60,895,217) (52,520,361) See accompanying notes to Consolidated Financial Statements. F-5 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, December 31, December 31, 2018 2017 2016 USD USD USD CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from stock option exercised 1,184,534 867,546 3,558,796 Proceeds from short-term bank loans - 23,009,280 - Repayment of short-term bank loans - (23,412,060) - Maturity of deposit as security for bank loans - - 37,756,405 Excess tax benefits from share-based compensation arrangements - - 2,613,831 Dividend paid by subsidiaries to noncontrolling interest shareholders (10,145,395) (18,789,151) (7,921,952)Proceeds from issuance of ordinary shares 590,265,000 - - Prepayment to an investment bank for potential share repurchase (10,000,000) - - Payment to noncontrolling interest shareholders in connection with their capital withdrawal - - (58,091,018)Net cash provided by/ (used in) financing activities 571,304,139 (18,324,385) (22,083,938) EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 3,243,017 12,607,032 (9,826,672) NET INCREASE IN CASH AND CASH EQUIVALENTS 119,543,711 35,571,315 38,827,640 Cash and cash equivalents at beginning of year 219,336,848 183,765,533 144,937,893 Cash and cash equivalents at end of year 338,880,559 219,336,848 183,765,533 Supplemental cash flow information Cash paid for income taxes 35,449,581 24,691,429 22,210,476 Cash paid for interest expense - 252,353 84,664 Noncash investing and financing activities: Acquisition of property, plant and equipment included in payables 3,687,742 7,548,964 4,912,937 Set-off loan receivable against accounts payable 3,784,297 - 5,848,400 Fair value of noncash assets acquired and liabilities assumed in acquisition of TianXinFu 337,186,892 - - See accompanying notes to Consolidated Financial Statements. F-6 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2018, 2017 AND 2016 NOTE 1 – DESCRIPTION OF BUSINESS AND SIGNIFICANT CONCENTRATIONS AND RISKS China Biologic Products Holdings, Inc. (“CBP”) and its subsidiaries (collectively, the “Company”), are principally engaged in the research, development,manufacturing and sales of biopharmaceutical products in the People’s Republic of China (the “PRC”). Biopharmaceutical products include plasma-based products and placenta polypeptide. All of the biopharmaceutical products are prescription medicinesadministered in the form of injections. The principal plasma products are human albumin and human immunoglobulin for intravenous injection (“IVIG”).The PRC subsidiaries own and operate plasma collection stations that purchase and collect plasma from individual donors. The plasma is processed intofinished goods after passing through a series of fractionating processes. On January 1, 2018, the Company acquired 80% equity interest in TianXinFu (Beijing) Medical Appliance Co., Ltd. (“TianXinFu”), a medical devicecompany primarily engaging in manufacturing and sale of regenerative medical biomaterial products. Biomaterial products include artificial dura mater andspinal dura mater products, with extracted collagen as the main raw material, which are applied in brain and spinal surgeries. All of the Company’s plasma products require government approval before the products are sold to customers. The Company primarily sells its products tohospitals and inoculation centers directly or through distributors in the PRC. On July 21, 2017, China Biologic Products Holdings, Inc. (the “Successor”) succeeded to the interests of China Biologic Products, Inc. (the “Predecessor”)following a redomicile merger pursuant to an agreement and plan of merger dated as of April 28, 2017 (the “Merger Agreement”) between the Successor andthe Predecessor. Pursuant to the Merger Agreement, the Predecessor merged with and into the Successor, with the Successor surviving the merger and eachissued and outstanding shares of Predecessor's common stock converted into the right to receive one ordinary share of the Successor. The consolidatedfinancial statements of the Successor represents the continuation of the financial statements of the Predecessor, reflecting the assets and liabilities, retainedearnings and other equity balances of the Predecessor before the domiciliation. The equity structure is restated using the exchange ratio established in theMerger Agreement to reflect the number of shares of the Successor. Cash Concentration The Company maintains cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limitsfor its bank accounts located in the United States or may exceed Hong Kong Deposit Protection Board insured limits for its bank accounts located in HongKong or may exceed the insured limits for its bank accounts in China established by the People’s Bank of China. Total cash at banks and deposits, includingcash and equivalents, time deposits and short term investments as of December 31, 2018 and December 31, 2017 amounted to $951,336,787 and$241,761,593, respectively, of which $3,227,530 and $2,577,139 are insured, respectively. The Company has not experienced any losses in uninsured bankdeposits and does not believe that it is exposed to any significant risks on cash held in bank accounts. Sales Concentration The Company’s two major biopharmaceutical products are human albumin and IVIG. Human albumin accounted for 32.0%, 35.8% and 39.2% of the totalsales for the years ended December 31, 2018, 2017 and 2016, respectively. IVIG accounted for 24.3%, 31.7% and 34.6% of the total sales for the years endedDecember 31, 2018, 2017 and 2016, respectively. The Company expects sales from these two products to represent a substantial portion of its sales in thefuture. If the market demands for human albumin and IVIG cannot be sustained in the future or the price of human albumin and IVIG decreases, theCompany’s operating results could be adversely affected. Substantially all of the Company’s customers are located in the PRC. There were no customers that individually comprised 10% or more of sales during theyears ended December 31, 2018, 2017 and 2016. No individual customer represented 10% or more of accounts receivables as at December 31, 2018 and2017. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. F-7 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Purchase Concentration There was one supplier, namely, Xinjiang Deyuan Bioengineering Co., Ltd. (“Xinjiang Deyuan”) (see Note 10), that comprised 10% or more of the totalpurchases during the years ended December 31, 2018, 2017 and 2016. No individual supplier represented 10% or more of accounts payables as at December31, 2018. Chongqing Sanda Great Exploit Pharmaceutical Co, Ltd. represented more than 10% of accounts payables as at December 31, 2017. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles inthe United States of America (“GAAP”), and include the financial statements of the Company and its subsidiaries in which CBP, directly or indirectly, has acontrolling financial interest. All intercompany balances and transactions have been eliminated upon consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and thereported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to suchestimates and assumptions include the useful lives of property, plant and equipment and intangibles with definite lives, the collectability of accountsreceivable and loan receivable, the fair value determinations of stock compensation awards and short term investments, identifiable assets acquired andliabilities assumed and noncontrolling interest in business combinations, the realizability of deferred income tax assets and inventories, the recoverability ofintangible assets, land use rights, property, plant and equipment, goodwill and equity method investment, and accruals for income tax uncertainties and othercontingencies. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. Foreign Currency Translation The accompanying consolidated financial statements of the Company are reported in US dollar. The financial position and results of operations of theCompany’s subsidiaries in the PRC are measured using the Renminbi, which is the local and functional currency of these entities. Assets and liabilities of thesubsidiaries are translated at the prevailing exchange rate in effect at each period end. Revenues and expenses are translated at the average rate of exchangeduring the period. Translation adjustments are included in other comprehensive income/(losses). Revenue Recognition During the years ended December 31, 2017 and 2016, revenue was recognized when persuasive evidence of an arrangement existed, delivery of the producthas occurred and the customer took ownership and assumed risk of loss, the sales price was fixed or determinable and collection of the relevant receivablewas probable. For all sales, the Company required a signed contract or purchase order, which specified pricing, quantity and product specifications. Deliveryof the product occurred when the customer received the product, which was when the risks and rewards of ownership have been transferred. Delivery wasevidenced by signed customer acknowledgement. The Company’s sales agreements did not provide the customer the right of return, unless the product wasdefective in which case the Company allowed for an exchange of product or return. For the periods presented, defective product returns were inconsequential.Revenue represents the invoiced amount of products sold, net of value added taxes (VAT). Effective January 1, 2018, the Company adopted the new guidance of ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”), whichsupersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition. Topic 606 requires the Company to recognize revenue upontransfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled inexchange for those goods or services. F-8 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company sells biopharmaceutical and biomaterial products to hospitals, inoculation centers and distributors. For all sales, the Company requires asigned contract or purchase order, which specifies pricing, quantity and product specifications.The Company recognizes revenue upon the satisfaction of itsperformance obligation, which is to transfer the control of the promised products to customers in an amount that reflects the consideration to which theCompany expects to be entitled to in exchange for those products, excluding amounts collected on behalf of third parties (e.g. value-added taxes). Thetransfer of control of the products is satisfied at a point in time, which is the delivery of the products to customers’ premises and evidenced by signedcustomer acknowledgement. The selling price, which is specified in the signed contracts or purchase orders, is fixed. The Company has unconditional right toreceive full payment of the sales price, upon the delivery of the products to customers and the signing of the customer acknowledgement. Customers arerequired to pay under the customary payment terms, which is generally less than six months. Advances from customers (a contract liability) is recognizedwhen the Company has an unconditional right to a payment before it transfer the products to customers, and are included in other payables and accruedexpenses. Fair Value Measurements The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or mostadvantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes betweenobservable and unobservable inputs, which are categorized in one of the following levels: • Level 1 Inputs: Unadjusted quoted prices for identical assets or liabilities in active markets accessible to the entity at the measurement date. • Level 2 Inputs: Other than quoted prices included in Level 1, inputs that are observable for the asset or liability, either directly or indirectly, forsubstantially the full term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, therebyallowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The fair value measurement level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fairvalue measurement. See Note 15 to the Consolidated Financial Statements. Cash and Cash Equivalents Cash consists of cash on hand and demand deposits. The Company considers all highly liquid investments with original maturities of three-month or less atthe time of purchase to be cash equivalents. As of December 31, 2018 and 2017, the Company maintained cash and cash equivalents at banks in the following locations: December 31, 2018 December 31, 2017 USD USD PRC, excluding Hong Kong 158,739,504 214,157,592 Hong Kong 3,936,815 - U.S. 175,133,834 4,708,801 Total 337,810,153 218,866,393 F-9 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Short term investments The Company’s short term investments represent bank financial products with original maturity of less than one year when purchased. The Company elects toapply the fair value option for the short term investments to more accurately reflect market and economic events in its earnings. Gains or losses from the shortterm investments is recorded in other income, net in the statements of comprehensive income. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable is recognized when the Company has an unconditional right to receive consideration. A right to receive consideration is unconditionalif only the passage of time is required before payment of that consideration is due. Accounts receivable are recorded at the invoiced amount and do not bearinterest. Amounts collected on trade accounts receivable are included in cash provided by operating activities in the consolidated statements of cash flows.The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the requiredallowance, management considers historical losses, the customers’ financial condition, the amount of accounts receivables in dispute, the accountsreceivables aging and the customers’ payment patterns. The Company reviews its allowance for doubtful accounts monthly. Past due balances are reviewedindividually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential forrecovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. Cost of work-in-process and finishedgoods comprise direct materials, direct production costs and an allocation of production overheads based on normal operating capacity. Net realizable valueis the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Adjustmentsare recorded to write down the carrying amount of any obsolete and excess inventory to its estimated net realizable value based on historical and forecasteddemand. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment attributable to manufacturing activities is capitalized as part of inventories, and recognized as cost of saleswhen the inventory is sold. Cost incurred in the construction of property, plant and equipment, including downpayments and progress payments, are initiallycapitalized as construction-in-progress and transferred into their respective asset categories when the assets are ready for their intended use, at which timedepreciation commences. Depreciation on property, plant and equipment is calculated on the straight-line method over the estimated useful lives of the assets. Estimated useful lives ofthe assets are as follows: Buildings20-45 yearsMachinery and equipment10 yearsFurniture, fixtures, office equipment and vehicles5-10 years When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and the proceeds received thereon.Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized and amortized over the remaininguseful life. F-10 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Business Combination The Company accounts for its business combination using the acquisition method in accordance with ASC Topic 805 (“ASC 805”): Business Combinations.An acquirer is required to recognize the identifiable acquired assets, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisitiondate, measured at their fair values as of that date. The consideration transferred of an acquisition is measured as the aggregate of the fair values at the date ofexchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies asof the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. The excess of (i) the total purchase price and fair value ofthe noncontrolling interests over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of identifiable assets acquired and liabilities assumed. Goodwill is notamortized, but is tested for impairment at the reporting unit level on at least an annual basis and more frequently when an event occurs or circumstanceschange that would more likely than not reduce the fair value of a reporting unit below its carrying amount. When performing an evaluation of goodwillimpairment, the Company has elected the option to first assess qualitative factors, such as significant events and changes to expectations and activities thatmay have occurred since the last impairment evaluation, to determine if it is more likely than not that goodwill might be impaired. If as a result of thequalitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the quantitative fair value test isperformed to determine if the fair value of the reporting unit exceeds its carrying value. The Company has adopted Accounting Standards Update ("ASU") 2017-04, Simplifying the Test for Goodwill Impairment, for annual goodwill impairmenttests from January 1, 2018. This guidance removes Step 2 of the goodwill impairment test, which required the estimation of an implied fair value of goodwillin the same manner as the calculation of goodwill upon a business combination. No impairment of goodwill was recognized for any of the years presented. Equity Method Investment Investment in an investee in which the Company has the ability to exercise significant influence, but does not have a controlling interest is accounted forusing the equity method. Significant influence is generally presumed to exist when the Company has an ownership interest in the voting stock between 20%and 50%, and other factors, such as representation on the board of directors and participation in policy-making processes, are considered in determiningwhether the equity method of accounting is appropriate. Under the equity method of accounting, the Company’s share of the investee’s results of operationsis included in other income (expenses) in the Company’s consolidated statements of comprehensive income. Deferred taxes are provided for the difference, ifany, between the book and tax basis of the investment. The Company determines the difference between the carrying amount of the investee and theunderlying equity in net assets which results in an excess basis in the investment. The excess basis is allocated to the underlying assets and equity methodgoodwill of the Company’s investee. The excess basis allocated to the underlying assets is either amortized or depreciated over the applicable useful lives.The equity method goodwill, which is $1,192,320 and $1,252,387 at December 31, 2018 and 2017, respectively, is not amortized or tested for impairment;instead the equity method investment is tested for impairment whenever events or changes in circumstances indicate that the carrying value of the investmentmay not be recoverable. The Company recognizes a loss if it is determined that other than temporary decline in the value of the investment exists. Theprocess of assessing and determining whether an impairment on a particular equity investment is other than temporary requires significant amount ofjudgment. To determine whether an impairment is other-than-temporary, management considers whether the Company has the ability and intent to hold theinvestment until recovery and whether evidence indicating the carrying value of the investment is recoverable outweighs evidence to the contrary. Noimpairment loss was recognized by the Company for the years ended December 31, 2018, 2017 and 2016. The Company’s equity method investment as of December 31, 2018 and 2017 represented 35% equity interest investment in Xi’an Huitian Blood ProductsCo., Ltd. (“Huitian”), which the Company acquired in October 2008. Government Grants Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attaching to them and the grantswill be received. Grants that compensate research and development expenses are recognized as a reduction to the related research and development expenses.Grants that compensate the Company for the cost of property, plant and equipment and land use rights are recognized as deferred income and are recognizedas a reduction of depreciation and amortization during the useful life of the asset. For the years ended December 31, 2018, 2017 and 2016, the Company received government grants of RMB4,837,300 (approximately $704,795),RMB2,405,210 (approximately $368,093) and RMB5,056,361 (approximately $728,874), respectively, which have been recognized as a reduction ofresearch and development expenses. F-11 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. For the year ended December 31, 2012, the Company received government grants of RMB18,350,000 (approximately $2,989,215) related to the technicalupgrade of the manufacturing facilities in Guizhou Taibang, which was recorded as deferred income. The grants amortized amounted to $277,801, $271,754and $276,388 for the years ended December 31, 2018, 2017 and 2016, respectively. For the year ended December 31, 2015, the Company received government grants of RMB15,000,000 (approximately $2,452,864) related to the newmanufacturing facilities for factor products in Shandong Taibang, which was recorded as deferred income. These grants are amortized as the related assets aredepreciated. The grants amortized amounted to $227,085, $222,143 and $410,369 for the year ended December 31, 2018, 2017 and 2016, respectively. Intangible Assets Intangible assets with finite useful life are amortized on a straight-line basis, as the pattern of economic benefit of intangible assets cannot be reliablydetermined, over the estimated useful lives of the respective assets. The Company’s amortizable intangible assets consist of permits and license, customerrelationships, technical know-how and others with the following estimated useful lives. Permits and license 5-10 years Customer relationships 7 years Technical know-how 3-12 years Others 5-10 years The estimated useful life is the period over which the intangible asset is expected to contribute directly or indirectly to the future cash flows of the Company. The in-process research and development assets acquired in a business combination are accounted for as an indefinite-lived intangible asset until completionor abandonment of the associated research and development activities. Land Use Rights Land use rights represent the exclusive right to occupy and use a piece of land in the PRC for a specified contractual term. Land use rights are carried at cost,less accumulated amortization. Amortization is calculated using the straight-line method over the contractual period of the rights ranging from 40 to 50years. Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses for the years ended December 31, 2018, 2017 and 2016 were$9,524,412, $6,503,712 and $7,021,992, respectively. These expenses include the costs of the Company’s internal research and development activities. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequencesattributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax loss andtax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years inwhich those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates isrecognized in the consolidated statements of comprehensive income in the period that includes the enactment date. A valuation allowance is provided toreduce the amount of deferred income tax assets if it is considered more likely than not that some portion or all of the deferred income tax assets will not berealized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income taxpositions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in theperiod in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties ingeneral and administrative expenses. Employee Benefit Plans Pursuant to relevant PRC regulations, the Company is required to make contributions to various defined contribution plans organized by municipal andprovincial PRC governments. The contributions are made for each PRC employee at rates ranging from 25% to 43% on a standard salary base as determinedby local social security bureau. Contributions to the defined contribution plans are charged to the consolidated statements of comprehensive income whenthe related service is provided. For the years ended December 31, 2018, 2017 and 2016, the costs of the Company's contributions to the defined contributionplans amounted to $5,581,682, $3,763,276, and $3,258,629, respectively. F-12 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company has no other obligation for the payment of employee benefits associated with these plans beyond the contributions described above. Share-based Payment The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the awardand recognizes the cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. Forgraded vesting awards, the Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award, providedthat the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at thatdate. Impairment of Long-lived Assets Long-lived assets, including property, plant and equipment, land use rights and intangible assets subject to amortization, are reviewed for impairmentwhenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived assetor asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group toits carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment isrecognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discountedcash flow models, quoted market values and third-party independent appraisals, as considered necessary. Earnings per Share Basic earnings per ordinary share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinaryshare outstanding during the year using the two-class method. Under the two-class method, net income is allocated between ordinary share and otherparticipating securities based on their participating rights in undistributed earnings. The Company’s nonvested shares were considered participatingsecurities since the holders of these securities participate in dividends on the same basis as ordinary shareholders. Diluted earnings per share is calculated bydividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary share equivalent, if any, by the weighted averagenumber of ordinary share and dilutive ordinary share equivalent outstanding during the year. Potential dilutive securities are not included in the calculationof diluted earnings per share if the impact is anti-dilutive. Segment Reporting The Company uses the management approach in determining reportable operating segments. The management approach consider the internal reporting usedby the chief operating decision maker for making operating decisions about the allocation of resources of the segment and the assessment of its performancein determining the Company’s reportable operating segments. As a result of the business combination completed on January 1, 2018 as described in Note 3,the Company classified the reportable operating segments for the year ended December 31, 2018 into (i) biopharmaceutical products and (ii) biomaterialproducts. Biopharmaceutical products currently include plasma products and placenta polypeptide. The Company had one operating segment,biopharmaceutical products segment, which included plasma-based products and placenta polypeptide for the years of 2017 and 2016. Substantially all of the Company’s operations and customers are located in the PRC, and therefore, no geographic information is presented. F-13 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover awide range of matters, including, among others, government investigations and tax matters. An accrual for a loss contingency is recognized when it isprobable that a liability has been incurred and the amount of loss can be reasonably estimated. Disclosure will be made if an unfavorable outcome isdetermined to be reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts withCustomers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles thatgovern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. The original effective date forASU 2014-09 would have required the Company to adopt beginning in its first quarter of 2017. In August 2015, the FASB issued ASU No. 2015-14, Revenuefrom Contracts with Customers (Topic 606) – Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for one year and permits earlyadoption as early as the original effective date of ASU 2014-09. The new revenue standard may be applied retrospectively to each prior period presented(“full retrospective method) or retrospectively with the cumulative effect recognized as of the date of adoption (“modified retrospective method”). TheCompany applied the modified retrospective method to those contracts that are not completed contracts on January 1, 2018 upon adoption of ASU 2014-09.Results for reporting periods beginning after January 1, 2018 are presented under the new revenue recognition, while prior period amounts are not adjustedand continue to be reported in accordance with ASC 605. The adoption of new revenue standard did not impact retained earnings as of January 1, 2018.There are no changes between the reported results under Topic 606 and those have been reported under legacy US GAAP. In July 2015, the FASB issued ASU No.2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”), which eliminated previous analysis ofmeasurement of inventory and requires to measure most inventory at the lower of cost and net realizable value. Net realizable value is the estimated sellingprices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effectiveprospectively for annual periods beginning after December 15, 2016, and interim periods therein. The Company adopted ASU 2015-11 on January 1, 2017and concluded that no impact on its consolidated financial statements as a result of the new adoption of the guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic842): Targeted Improvements (“ASU 2018-11”). The guidance modified lease accounting for both lessees and lessors to increase transparency andcomparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standardsand disclosing key information about leasing arrangements. The guidance is effective for public companies for annual reporting periods, and interim periodswithin those years, beginning after December 15, 2018. Early adoption is permitted. The Company will adopt the guidance for financial statements periodsbeginning January 1, 2019 using the modified retrospective transition method and initially apply the transition provisions at January 1, 2019, which allowsthe Company to continue to apply the legacy guidance in ASC 840 for periods prior to 2019. This adoption approach will result in a balance sheetpresentation that will not be comparable to the prior period in the first year of adoption. The adoption of this ASU will result in the recognition of right-of-useassets and lease liabilities for operating lease of approximately $2.0 million and $1.9 million, respectively. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which addressed andprovided guidance for each of eight specific cash flow issues with the objective of reducing the existing diversity in practice. This standard will be effectivefor public companies for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has early adopted ASU2016-15 on its consolidated financial statements since January 1, 2017 and there was no impact as a result of the adoption. F-14 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). Thisstandard required that companies recognize the income tax consequences of an intra-entity transfer of an asset (other than inventory) when the transfer occurs.Current guidance prohibits companies from recognizing current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to anoutside party. This standard will be effective for public companies for annual periods beginning after December 15, 2017, including interim periods withinthat reporting period. The Company has adopted ASU 2016-16 on its consolidated financial statements in 2017 and there was no impact as a result of theadoption. Effective January 1, 2017, on a retrospective basis, the Company adopted FASB ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic740). This update required that deferred income tax assets and liabilities be classified as noncurrent. As a result of adoption of this guidance, the Companyreclassified current deferred income tax assets in the amount of $4,625,996, which had been included in prepayments and other current assets, to othernoncurrent assets as of December 31, 2016. There was no impact on results of operations or cash flows as a result of the adoption of this guidance. Effective January 1, 2017, the Company adopted FASB ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. The standardsimplified certain aspects of the accounting for share-based payment transactions, including recognition of excess tax benefits and deficiencies, classificationof awards and classification in the statement of cash flows. As a result of adoption, the Company elected to adopt the change regarding income taxes on aprospective basis to recognize excess tax benefits and deficiencies from stock-based compensation as a discrete item in income tax expense, which werehistorically recorded as additional paid-in-capital. In addition, the Company elected to apply the change regarding classification in the statement of cashflows prospectively to record excess tax benefits from stock-based compensation from cash flows from financing activities to cash flows from operatingactivities. Excess tax benefits for the year ended December 31, 2017 was $621,381 and the adoption of this standard had no material impact on theCompany’s financial statements. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”), which changes the definition of a business toassist entities with evaluating when a set of transferred assets and activities is a business. If substantially all of the fair value is concentrated in a single assetor a group of similar assets, the acquired set is not a business. If this is not met, the entity then evaluates whether the set meets the requirement that a businessinclude, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Determining whether a setconstitutes a business is critical because the accounting for a business combination differs significantly from that of an asset acquisition. ASU 2017-01 iseffective for fiscal years beginning after December 15, 2017, and interim periods within those years. ASU 2017-01 will be applied prospectively to anytransactions occurring within the period of adoption. Early adoption is permitted, including for interim or annual periods in which the financial statementshave not been issued or made available for issuance. The Company has adopted ASU 2017-01 from January 1, 2018 for the acquisition of TianXinFu. (seeNote 3). In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU2017-04”). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. In computing theimplied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets andliabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired andliabilities assumed in a business combination. As a result of ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair valueof a reporting unit with its carrying amount and then recognize an impairment charge, as necessary, for the amount by which the carrying amount exceeds thereporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for fiscal years and interimperiods within those years beginning after December 15, 2019, and early adoption is permitted for interim or annual goodwill impairment tests performedafter January 1, 2017. The Company has early adopted ASU 2017-04 from January 1, 2018. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirementsfor Fair Value Measurement (ASU 2018-13) (“ASU 2018-13”). ASU 2018-13 modifies certain disclosure requirements on fair value measurements, including(i) clarifying narrative disclosure regarding measurement uncertainty from the use of unobservable inputs, if those inputs reasonably could have beendifferent as of the reporting date, (ii) adding certain quantitative disclosures, including (a) changes in unrealized gains and losses for the period included inother comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (b) the range and weighted average ofsignificant unobservable inputs used to develop Level 3 fair value measurements, and (iii) removing certain fair value measurement disclosure requirements,including (a) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (b) the policy for timing of transfers betweenlevels of the fair value hierarchy and (c) the valuation processes for Level 3 fair value measurements. The amendments in ASU 2018-13 are effective for allentities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is permitted to early adopt anyremoved or modified disclosures and delay adoption of the additional disclosures until their effective date. The Company is currently evaluating the effect ofthe disclosure requirements of ASU 2018-13 will have on its consolidated financial statements and does not expect the impact to have a material effect. F-15 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 3 – BUSINESS COMBINATION On October 12, 2017, the Company entered into a definitive agreement with PW Medtech Group Limited (“PWM”), a company listed on the Stock Exchangeof Hong Kong Limited, to acquire 80% equity interest of TianXinFu (Beijing) Medical Appliance Co., Ltd. (“TianXinFu”) in exchange for 5,521,000ordinary shares of CBP. TianXinFu is a medical device company primarily engaging in the manufacturing and sale of regenerative medical biomaterialproducts, of which 80% equity interest was owned by PWM and 20% by a third party before this acquisition. The Company completed the acquisition on January 1, 2018. The transaction was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The results ofTianXinFu’s operations have been included in the Company’s consolidated financial statements since January 2, 2018. For the year ended December 31,2018, total sales and net income for TianXinFu which have been included in the Company’s consolidated financial statements were $44.7 million and $16.4million, respectively. The following table presents the amounts recognized for assets acquired and liabilities assumed for TianXinFu as of the acquisition date. The noncontrollinginterest represents the fair value of the 20% equity interest not held by the Company: As of January 01, 2018 USD Cash and cash equivalents 97,702,278 Accounts receivable 312,832 Inventories 2,745,771 Other current assets 283,824 Property, plant and equipment 6,522,447 Land use rights 4,135,141 Intangible assets 63,725,856 Deferred income tax assets 480,334 Current liabilities (6,129,418)Deferred income tax liabilities (10,382,902)Fair value of noncontrolling interest (53,871,002)Goodwill 329,364,009 Total purchase consideration 434,889,170 The intangible assets consist of customer relationship, technical know-how and in-process research and development assets. The fair values of the customerrelationship of $54,956,664 and technical know-how of $7,514,256 are amortized over 7 years and 3-12 years, respectively on a straight line basis. The fairvalue of in-process research and development assets of $1,254,937 are indefinite-lived until the completion or abandonment of the associated research anddevelopment activities. The estimated fair value of the noncontrolling interest in TianXinFu was determined by an independent valuer by using discount cash flow model. The goodwill resulting from the business combination primarily attributed to the synergies and economic scale anticipated to be achieved from combiningthe operations of the Company and TianXinFu, and the assigned assembled workforce. None of the goodwill is expected to be deductible for income taxpurpose. As of the acquisition date, the goodwill acquired in the business combination was assigned to the biomaterial products segment of $182 million and to thebiopharmaceutical products segment of $147 million. The exchange difference during the period for goodwill is $15,775,206. Unaudited Pro Forma Financial Information The following unaudited pro forma consolidated financial information for the year ended December 31, 2017 are presented as if the acquisition had beenconsummated on January 1, 2017 after giving effect to purchase accounting adjustments. These pro forma results have been prepared for comparative purposeonly and do not purport to be indicative of what operating results would have been had the acquisition actually taken place on the date indicated and maynot be indicative of future operating results. F-16 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Unaudited pro forma consolidated statements of comprehensive income for the year ended December 31, 2017: December 31, 2017 USD Sales 412,248,989 Net income 100,749,486 NOTE 4 – ACCOUNTS RECEIVABLE Accounts receivable at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 USD USD Accounts receivable 126,352,173 77,858,266 Less: Allowance for doubtful accounts (1,236,331) (590,991)Total 125,115,842 77,267,275 F-17 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The activity in the allowance for doubtful accounts – accounts receivable for the years ended December 31, 2018, 2017 and 2016 are as follows: For the Years Ended December 31, 2018 December 31, 2017 December 31, 2016 USD USD USD Beginning balance 590,991 533,596 443,624 Provisions 655,148 23,783 123,239 Foreign currency translation adjustment (9,808) 33,612 (33,267)Ending balance 1,236,331 590,991 533,596 NOTE 5 – PREPAYMENTS AND OTHER CURRENT ASSETS Prepayments and other current assets as of December 31, 2018 mainly represented other receivables of $15,897,405, prepayment to an investment bank for ashare repurchase program of $10,000,000 and other prepayments of $9,081,680. On November 1, 2018, the Company announced a share repurchase program,which was approved by the Board of Directors on October 30, 2018. Under the share repurchase program, CBP may repurchase up to US$100 million worth ofshares over 6 months following the date of approval. Prepayments and other current assets as of December 31, 2017 mainly represented other receivables of $10,412,739 and prepayments of $4,886,604. The activity in the allowance for doubtful accounts –prepayments and other receivables for the years ended December 31, 2018, 2017 and 2016 are asfollows: For the Years Ended December 31, 2018 December 31, 2017 December 31, 2016 USD USD USD Beginning balance 4,960,020 4,671,896 4,924,063 Provisions 96,267 - 65,341 Foreign currency translation adjustment (273,194) 288,124 (317,508)Ending balance 4,783,093 4,960,020 4,671,896 NOTE 6 – INVENTORIES Inventories at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 USD USD Raw materials 124,408,741 107,651,325 Work-in-process 57,457,153 42,202,306 Finished goods 61,429,618 59,717,204 Total 243,295,512 209,570,835 Raw materials mainly comprised of human plasma collected from the Company’s plasma collection stations. Work-in-process represented intermediateproducts in the process of production. Finished goods mainly comprised of plasma products. Provisions to write-down the carrying amount of obsoleteinventory to its estimated net realizable value amounted to nil, nil and $256,862 for the years ended December 31, 2018, 2017 and 2016, respectively, andwere recorded as cost of sales in the consolidated statements of comprehensive income. F-18 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 7 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 USD USD Buildings 86,923,161 41,669,081 Machinery and equipment 111,797,936 41,102,242 Furniture, fixtures, office equipment and vehicles 11,670,963 9,980,062 Construction in progress 7,713,523 105,226,787 Total property, plant and equipment, gross 218,105,583 197,978,172 Accumulated depreciation (42,447,406) (33,862,836)Impairment of property, plant and equipment (2,060,844) - Total property, plant and equipment, net 173,597,333 164,115,336 Prepayment for property, plant and equipment 4,730,028 2,697,413 Property, plant and equipment, net 178,327,361 166,812,749 As a result of the planned commencement of operation of the new facility, the Company disposed certain machinery and equipment in the old facility ofShandong Taibang and incurred a disposal loss of $1,001,000 and $3,228,845 for the years ended December 31, 2018 and 2017. Loss on disposal ofproperty, plant and equipment for the year ended December 31, 2016 was $293,098. Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $13,809,041, $11,691,731 and $11,962,983, respectively. No interestexpenses were capitalized into construction in progress for the years ended December 31, 2018, 2017 and 2016. NOTE 8 – INTANGIBLE ASSETS Intangible assets at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 USD USD Permits and license 4,579,081 4,809,764 Customer relationship 52,320,870 - Technical know-how 7,153,870 - In-process research and development assets 1,194,740 - Others 1,041,652 542,997 Total intangible assets 66,290,213 5,352,761 Accumulated amortization (13,031,342) (4,816,423)Total intangible assets, net 53,258,871 536,338 Amortization expense for the years ended December 31, 2018, 2017 and 2016 was $8,742,607, $497,344 and $570,288, respectively. The estimated annual amortization expense for intangible assets in each of the next five years is as follows: For the Years Ended December 31, Amount USD 2019 8,115,855 2020 8,108,251 2021 8,107,674 2022 8,103,936 2023 8,040,120 Total 40,475,836 F-19 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 9 – RELATED PARTY TRANSACTIONS Private Placement On August 24, 2018, the Company entered into (i) a share purchase agreement with Beachhead Holdings Limited (“Centurium”) and Double DoubleHoldings Limited (“DD”), which are affiliated with two directors of the Company, Mr. David Hui Li and Mr. Joseph Chow (ii) a share purchase agreementwith PWM, the largest shareholder of the Company with a director representative, Ms. Yue’e Zhang (iii) share purchase agreements with two third partyinvestors, for the issuance and sale of 3,050,000, 800,000 and 2,000,000 ordinary shares of CBP at a per share purchase price of $100.9, respectively, to raiseaggregate gross proceeds of approximately $590 million. The transaction was approved by a special committee formed by the board of directors of theCompany, consisting of two independent directors. On the same date, CBP issued 1,800,000 ordinary shares to Centurium and 2,000,000 ordinary shares totwo third party investors, pursuant to their respective share purchase agreements. On September 4, 2018, DD assigned its rights and obligations under theshare purchase agreement to Centurium and CBP issued 1,250,000 additional ordinary shares to Centurium thereafter. On September 21, 2018, CBP issued800,000 ordinary shares to PWM. Prepayments for Investments in Equity Securities On November 28, 2018, the Company entered into a share transfer agreement with Smart Step Investments Limited (“Smart Step”), the then largestshareholder of Beijing Taijie Weiye Technology Co., Ltd. (“TJWY Medical”), pursuant to which the Company purchased approximately 11.55% equityinterests of TJWY Medical from Smart Step in a cash consideration of $10,812,893. Pursuant to the share transfer agreement, the Company has the right torequest Smart Step to redeem full or part of the equity interests in TJWY transferred at the original purchase price plus 6% compound interest rate per annum.Such right can be exercised by the Company within 6 months from the third anniversary of the closing date of the transaction. The Company paid the 100% cash consideration on December 21, 2018. The transaction was completed on January 23, 2019. TJWY Medical is a manufacturer of interventional products. The ultimate beneficial owner of Smart Step is the mother of Ms. Yue’e Zhang, a director of theCompany. NOTE 10 – LOAN RECEIVABLE In August 2015, the Company entered into a cooperation agreement with Xinjiang Deyuan and the controlling shareholder of Xinjiang Deyuan (“DeyuanShareholder”). Pursuant to the agreement, (i) Xinjiang Deyuan agreed to sell to Guizhou Taibang no less than 500 tonnes of source plasma in batches over thenext three years, before July 31, 2018, and (ii) Guizhou Taibang agreed to provide Xinjiang Deyuan with an interest-bearing loan at an interest rate of 6% perannum with an aggregate principal amount of RMB300,000,000 (approximately $43,710,000). The loan was due July 31, 2018 and secured by a pledge ofDeyuan Shareholder’s 58.02% equity interest in Xinjiang Deyuan. In August 2018, the Company extended this cooperation agreement with Xinjiang Deyuan and Deyuan Shareholder for another 3 years to purchase at least anadditional 500 tonnes of source plasma and to extend the due date of the loan to July 31, 2021.The loan is secured by a pledge of Deyuan Shareholder’s58.02% equity interest in Xinjiang Deyuan. $3,784,297 of the loan principal was set off against the equivalent amount in accounts payable for purchase ofplasma from Xinjiang Deyuan for the year ended December 31, 2018. Interest income of $2,904,886, $2,514,936 and $2,661,700 were recognized and $695,757, $2,514,936 and $1,985,767 were received in cash by GuizhouTaibang and $2,062,426,nil and $675,933 were set off against the equivalent amounts in accounts payable for the purchase of plasma from Xinjiang Deyuanfor the year ended December 31, 2018, 2017 and 2016, respectively. F-20 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 11 – OTHER PAYABLES AND ACCRUED EXPENSES Other payables and accrued expenses at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 USD USD Payables to a potential investor (1) 8,574,254 8,679,073 Payable to Guizhou Eakan Investing Corp. (2) 2,121,392 2,228,262 Salaries and bonuses payable 23,543,535 19,770,025 Accruals for sales promotion fee 29,401,827 19,346,659 Payables for construction work 8,181,773 9,135,810 Other tax payables 1,456,184 2,891,714 Advance from customers(3) 9,101,834 2,425,975 Deposits received 7,463,172 4,434,443 Others 10,089,822 6,915,903 Total 99,933,793 75,827,864 (1)The payables to a potential investor comprises deposits received from a potential investor in the amount of $4,977,112 and $5,227,846 as of December31, 2018 and 2017, respectively, and related interest plus penalty on these deposits totaling $3,597,142 and $3,451,227 as of December 31, 2018 and2017, respectively. (2)Guizhou Taibang has payables to Guizhou Eakan Investing Corp., amounting to approximately $2,121,392 and $2,228,262 as of December 31, 2018and 2017, respectively. The Company borrowed this interest free advance for working capital purpose for Guizhou Taibang. The balance is due ondemand. See Note 17. (3)The change in advance from customers primarily represents the cash received, less amounts recognized as sales during the year. NOTE 12 – INCOME TAX The Company and each of its subsidiaries file separate income tax returns. The United States of America China Biologic Products Inc. was originally incorporated on December 20, 1989 under the laws of the State of Texas as Shepherd Food Equipment, Inc. OnNovember 20, 2000, Shepherd Food Equipment, Inc. changed its corporate name to Shepherd Food Equipment, Inc. Acquisition Corp., or Shepherd.Shepherd is the survivor of a May 28, 2003 merger between Shepherd and GRC Holdings, Inc., or GRC, a Texas corporation. In the merger, the survivingcorporation adopted the articles of incorporation and bylaws of GRC and changed its corporate name to GRC Holdings, Inc. On January 10, 2007, a plan ofconversion became effective pursuant to which GRC was converted into a Delaware corporation and changed its name to China Biologic Products, Inc. F-21 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. With the completion of domiciliation to the Cayman Islands on July 21, 2017, China Biologic Products Inc. was merged with and into China BiologicProducts Holdings, Inc., with China Biologic Products Holdings, Inc. as the surviving company. China Biologic Products Holdings, Inc. continued to be a U.S. corporation for U.S. federal income tax purposes and is subject to U.S. federal corporateincome tax at gradual rates of up to 35% for year 2017. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act has made significant changes to the U.S. Internal Revenue Code,including the taxation of U.S. corporations, by, among other things, limiting interest deductions, reducing the U.S. corporate income tax rate, disallowingcertain deductions that had previously been allowed, altering the expensing of capital expenditures, adopting elements of a territorial tax system, assessing arepatriation tax or “toll-charge” on undistributed earnings and profits of U.S.-owned foreign corporations, and introducing certain anti-base erosionprovisions. In 2017, the Company recorded a charge of approximately $40.3 million as a provisional amount for the repatriation tax on deemed repatriationto the United States of accumulated earnings. The charge for deemed repatriation will be payable by the Company over an eight-year period commencingApril 2018. In the second quarter of 2018, $3,250,000 repatriation tax was paid by the Company to the U.S. tax bureau. In August 2018, based on additional implementation guidance issued by the U.S. Treasury Department and the Internal Revenue Service, the Companyadjusted the provisional amount by reversing income tax payable and income tax expense of $7.5 million. The accounting for the income tax effect of theAct has been completed. Cayman Islands Under the current laws of Cayman Islands, China Biologic Products Holdings, Inc. is not subject to tax on its income or capital gains. British Virgin Islands Taibang Biological is incorporated in the British Virgin Islands. Under the current laws of the British Virgin Islands (BVI), Taibang Biological is not subjectto tax on income or capital gains. In addition, upon payments of dividends by Taibang Biological, no British Virgin Islands withholding tax is imposed. Hong Kong Taibang Holdings (Hong Kong) Limited (“Taibang Holdings”, formerly known as “Logic Holdings (Hong Kong) Limited”) is incorporated in Hong Kongand is subject to Hong Kong’s profits tax rate of 16.5% for the years ended December 31, 2018, 2017 and 2016. Taibang Holdings did not earn any incomethat was derived in Hong Kong for the years ended December 31, 2018, 2017 and 2016. Health Forward Holdings Limited (“Health Forward”) is incorporated in Hong Kong and is subject to Hong Kong’s profits tax rate of 16.5% for the yearended December 31, 2018. Health Forward did not earn any income that was derived in Hong Kong for the year ended December 31, 2018. The payments of dividends by Hong Kong companies are not subject to any Hong Kong withholding tax. F-22 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PRC The PRC’s statutory income tax rate is 25%. The Company’s PRC subsidiaries are subject to income tax at 25% unless otherwise specified. In October 2014, Shandong Taibang obtained a notice from the Shandong provincial government that granted it the High and New Technology Enterprisecertificate. This certificate entitled Shandong Taibang to enjoy a preferential income tax rate of 15% for a period of three years from 2014 to 2016. InDecember 2017, Shandong Taibang renewed its high and new technology enterprise qualification, which entitled it to enjoy a preferential income tax rate of15% for a period of three years from 2017 to 2019. According to CaiShui [2011] No. 58 dated July 27, 2011, Guizhou Taibang, being a qualified enterprise located in the western region of the PRC, enjoys apreferential income tax rate of 15% effective retroactively from January 1, 2011 to December 31, 2020. TianXinFu was recognized by Beijing provincial government as a high and new technology enterprise in 2009 and the latest renewal of its qualification wasobtained in 2018, which entitled TianXinFu to enjoy a preferential income tax rate of 15% for a period of three years from 2018 to 2020. The components of earnings (losses) before income tax expense by jurisdictions are as follows: For the Years Ended December 31, December 31, December 31, 2018 2017 2016 USD USD USD PRC, excluding Hong Kong 175,225,854 171,787,763 170,830,607 U.S. (11,303,223) (28,866,395) (19,408,283)BVI 2,341,136 3,488,680 2,498,629 Hong Kong (260,472) (2,280) (1,712)Total 166,003,295 146,407,768 153,919,241 Income tax expense for the years ended December 31, 2018, 2017 and 2016 represents current income tax expense and deferred income tax (benefit)/expense: For the Years Ended December 31, December 31, December 31, 2018 2017 2016 USD USD USD Current income tax expense-PRC 29,715,744 27,133,958 28,132,361 Current income tax expense-US (7,519,674) 40,290,367 - Deferred income tax benefit-PRC (4,657,379) (3,252,516) (3,006,541)Deferred income tax expense-US 497,489 - - Total income tax expense 18,036,180 64,171,809 25,125,820 The effective income tax rate based on income tax expense and earnings before income taxes reported in the consolidated statements of comprehensiveincome differs from the PRC statutory income tax rate of 25% due to the following: F-23 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. For the Years Ended December 31, December 31, December 31, 2018 2017 2016 (in percentage to earnings before income tax expense) PRC statutory income tax rate 25.0% 25.0% 25.0%Non-deductible expenses: Share-based compensation 1.4% 3.7% - Others 0.9% 1.1% 1.6%Tax rate differential (0.5)% (0.9)% (3.6)%Effect of PRC preferential tax rate (9.0)% (11.1)% (10.9)%Bonus deduction on research and development expenses (2.3)% (1.5)% (1.5)%Change in valuation allowance 0.4% (0.6)% 5.3%Repatriation tax (4.5)% 29.4% - Tax effect of equity method investment 0.3% (0.6)% 0.4%Excess tax benefits from stock option exercises (0.8)% (0.7)% - Effective income tax rate 10.9% 43.8% 16.3% The PRC tax rate has been used because the majority of the Company’s consolidated pre-tax earnings arise in the PRC. As of December 31, 2018 and 2017, significant temporary differences between the tax basis and financial statement basis of assets and liabilities that gaverise to deferred taxes were principally related to the following: December 31, 2018 December 31, 2017 USD USD Deferred income tax assets arising from: -Accrued expenses 7,587,118 6,558,359 -Deferred income 213,086 258,255 -Property, Plant and Equipment 1,149,033 1,210,006 -Other non-current assets 158,607 146,918 -Tax loss carryforwards 4,300,813 5,031,657 Gross deferred income tax assets 13,408,657 13,205,195 Less: valuation allowance (4,300,813) (5,031,657)Net deferred income tax assets 9,107,844 8,173,538 Deferred income tax liabilities arising from: - Property, plant and equipment (129,636) - - Intangible assets (7,947,786) (148,467)- Land use rights (552,602) - - Equity method investment (497,489) - - Dividend withholding tax (3,774,778) (6,085,290)Deferred income tax liabilities (12,902,291) (6,233,757) Classification on consolidated balance sheets: Deferred income tax assets, included in other non-current assets 9,107,844 8,173,538 Deferred income tax liabilities, included in other liabilities (12,902,291) (6,233,757) In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferredincome tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable incomeduring the periods in which those temporary differences become deductible and tax loss carryforwards are utilized. Management considers the scheduledreversal of deferred income tax liabilities (including the impact of available carryforwards periods), projected future taxable income, and tax planningstrategies in making this assessment. F-24 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The deferred income tax assets of $4,300,813 for tax loss carry forwards as of December 31, 2018 represented tax loss carryforwards of certain PRCsubsidiaries. For PRC income tax purposes, these PRC subsidiaries had tax loss carryforwards of $18,526,347, of which $4,806,145, $4,204,366, $4,644,148,$728,172 and $4,143,516 would expire by 2019, 2020, 2021, 2022 and 2023, respectively, if unused. In view of their cumulative losses positions,management determined it is more likely than not that deferred income tax assets of these PRC subsidiaries will not be realized, and therefore full valuationallowances of $4,300,813 and $5,031,657 were provided as of December 31, 2018 and 2017, respectively. For United States federal income tax purposes, CBP had nil tax loss carry forwards as of December 31, 2018 and 2017. All tax loss brought forwards of CBPhas been utilized by December 31, 2017 as a result of the repatriation tax on deemed repatriation of accumulated earnings to the United States. The following table presents the movement of the valuation allowance for deferred income tax assets for the years ended December 31, 2018, 2017 and 2016: For the Years Ended December 31, 2018 December 31, 2017 December 31, 2016 USD USD USD Beginning balance 5,031,657 26,629,179 8,160,611 Addition (deduction) during the year (507,897) (21,927,117) 18,676,456 Foreign currency translation adjustment (222,947) 329,595 (207,888)Ending balance 4,300,813 5,031,657 26,629,179 According to the prevailing PRC income tax law and relevant regulations, dividends relating to earnings accumulated beginning on January 1, 2008 that arereceived by non-PRC-resident enterprises from PRC-resident enterprises are subject to withholding tax at 10%, unless reduced by tax treaties or similararrangement. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding tax. Further, dividendsreceived by the Company from its overseas subsidiaries are subject to the U.S. federal income tax less any qualified foreign tax credits. Based on the dividendpolicy the Company has provided the deferred income tax liabilities of $7,351,023 on undistributed earnings of $74 million, approximately 50% ofShandong Taibang’s total undistributed earnings at December 31, 2014. During the years ended December 31, 2018, 2017 and 2016, the deferred income taxliabilities of $2,310,512, nil and $1,265,733 were paid following a sum of RMB148,760,000 (approximately $21,674,332), nil and RMB82,760,000(approximately $11,929,854) dividend distribution to Taibang Holdings (Hong Kong) Limited by Taibang Biotech (Shandong) Co., Ltd. in 2018, 2017 and2016, respectively, which was generated from distributed earnings of Shandong Taibang. Due to the Company’s plan and intention of reinvesting its earningsin its PRC business, the Company has not provided for the related deferred income tax liabilities on the remaining undistributed earnings of the PRCsubsidiaries totaling $613.6 million as of December 31, 2018. As of January 1, 2016 and for each of the years ended December 31, 2018, 2017 and 2016, the Company and its subsidiaries did not have any unrecognizedtax benefits, and therefore no interest or penalties related to unrecognized tax benefits were accrued. The Company does not expect that the amount ofunrecognized tax benefits will change significantly within the next 12 months. The Company and each of its PRC subsidiaries file income tax returns in the United States and the PRC, respectively. The Company is subject to U.S. federalincome tax examination by tax authorities for tax years beginning in 2007. According to the PRC Tax Administration and Collection Law, the statute oflimitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute oflimitations is extended to five years under special circumstances where the underpayment of taxes is more than RMB100,000 (approximately $14,570). In thecase of transfer pricing issues, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The PRC tax returns for theCompany’s PRC subsidiaries are open to examination by the PRC tax authorities for the tax years beginning in 2012. F-25 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 13 – OPTIONS AND NONVESTED SHARES Options Effective May 9, 2008, the Board of Directors adopted the China Biologic 2008 Equity Incentive Plan, (“the 2008 Plan”). The 2008 Plan provides for grantsof stock options, stock appreciation rights, performance units, restricted stock, restricted stock units and performance shares. A total of five million shares ofthe Company’s ordinary share may be issued pursuant to the 2008 Plan. The exercise price per share for the shares to be issued pursuant to an exercise of astock option will be no less than the fair market value per share on the grant date, except that, in the case of an incentive stock option granted to a person whoholds more than 10% of the total combined voting power of all classes of the Company’s stock or any of its subsidiaries, the exercise price will be no lessthan 110% of the fair market value per share on the grant date. All the options to be granted will have 10-year terms. The 2008 Plan expired on May 9, 2018and all ordinary shares reserved under the 2008 Plan had been granted. For the years ended December 31, 2018, 2017 and 2016, no stock options to purchase ordinary share were granted to any directors or employees. A summary of stock options activity for the years ended December 31, 2018, 2017 and 2016 is as follows: Weighted Weighted Average AverageRemaining Number of Exercise Contractual Aggregate Options Price Term in years Intrinsic Value USD USD Outstanding as of January 1, 2016 651,897 10.44 5.24 86,064,461 Granted - - Exercised (337,406) 10.55 (35,180,367)Forfeited and expired - - Outstanding as of December 31, 2016 314,491 10.32 3.84 30,568,083 Granted - - Exercised (85,242) 10.18 (7,868,258)Forfeited and expired - - Outstanding as of December 31, 2017 229,249 10.37 2.61 15,168,276 Granted - - Exercised (121,945) 9.71 (9,137,231)Forfeited and expired - - Outstanding as of December 31, 2018 107,304 11.13 2.28 7,570,681 Vested as of December 31, 2018 107,304 11.13 2.28 7,570,681 Exercisable as of December 31, 2018 107,304 11.13 2.28 7,570,681 For the years ended December 31, 2018, 2017 and 2016, the Company recorded stock compensation expense of nil, nil and $649,203, respectively, ingeneral and administrative expenses. F-26 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Nonvested shares For the years ended December 31, 2018, 2017 and 2016, nonvested shares were granted to certain directors and employees (collectively, the “Participant”).Pursuant to the nonvested share grant agreements between the Company and the Participant, the Participant will have all the rights of a shareholder withrespect to the nonvested shares. The nonvested shares granted to directors generally vest in one or two years. The nonvested shares granted to employeesgenerally vest in four years. A summary of nonvested shares activity for the year ended December 31, 2018, 2017 and 2016 is as follow: Number of Grant date weighted nonvested shares average fair value USD Outstanding as of January 1, 2016 669,100 77.49 Granted 511,200 119.75 Vested (255,150) 66.04 Forfeited (12,500) 66.74 Outstanding as of December 31, 2016 912,650 104.51 Granted 356,150 89.94 Vested (353,694) 91.32 Forfeited (1,080) 98.20 Outstanding as of December 31, 2017 914,026 103.95 Granted 333,620 79.23 Vested (256,830) 100.91 Forfeited (385,425) 98.86 Outstanding as of December 31, 2018 605,391 94.85 For the years ended December 31, 2018, 2017 and 2016, the Company recorded stock compensation expense of $23,130,570, $33,903,283 and $23,756,308in general and administrative expenses, respectively. As of December 31, 2018, approximately $44,891,282 of stock compensation expense with respect to nonvested shares is to be recognized over weightedaverage period of approximately 2.32 years. NOTE 14 – STATUTORY RESERVES The Company’s PRC subsidiaries are required to allocate at least 10% of its after tax profits as determined under generally accepted accounting principles inthe PRC to its statutory surplus reserve until the reserve balance reaches 50% of respective registered capital. For the years ended December 31, 2018, 2017and 2016, the Company's PRC subsidiaries made appropriations to the reserve fund of $18,844,626, $5,051 and $348,583, respectively. The accumulatedbalance of the statutory reserve as of December 31, 2018 and 2017 was $53,358,414 and $34,513,788, respectively. NOTE 15 – FAIR VALUE MEASUREMENTS Financial assets and liabilities of the Company primarily comprise of cash and cash equivalents, time deposits, short term investments, accounts receivable,loan receivable-current, other receivables, loan receivable-non-current, accounts payable, and other payables and accrued expenses. Management used thefollowing methods and assumptions to estimate the fair value of financial assets and liabilities at the relevant balance sheet dates: Fair Value of Financial Instruments Short-term financial assets and liabilities (including cash and cash equivalents, time deposits, accounts receivable, loan receivable-current, otherreceivables,accounts payable, and other payables and accrued expenses) – The carrying amounts of the short-term financial assets and liabilities approximatetheir fair values because of the short maturity of these instruments. Loan receivable-non-current – The carrying amounts of loan receivable approximate their fair value. The fair value is estimated using discounted cash flowanalysis based on the borrower’s incremental borrowing rates for similar borrowing. Recurring Fair Value Measurements The Company elects the fair value option to account for short term investments. The Company values its short term investments using the effective interestmethod with inputs of annualized rate of return provided by issuing banks. The annualized rate of return may range from 3.00% to 4.65% depending on theamount and time period invested. The Company classifies the valuation techniques that use these inputs as Level 2. F-27 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 16 – SALES The Company’s sales by product categories for the years ended December 31, 2018, 2017 and 2016 are as follows: For the Years Ended December 31,2018 December 31, 2017 December 31, 2016 USD USD USD Plasma products: Human Albumin 149,369,846 132,498,791 133,712,663 Immunoglobulin products: Human Immunoglobulin for Intravenous Injection 113,490,790 117,511,797 117,891,410 Other Immunoglobulin products 59,470,912 50,147,328 40,105,561 Others 31,677,439 21,049,636 17,281,111 Placenta Polypeptide 68,157,257 49,199,288 32,178,681 Biopharmaceutical products 422,166,244 370,406,840 341,169,426 Artificial Dura Mater 40,644,561 - - Others 4,066,764 - - Biomaterial products 44,711,325 - - Total 466,877,569 370,406,840 341,169,426 The Company’s sales by channel for the years ended December 31, 2018, 2017 and 2016 are as follows: For the Years Ended December 31, 2018 December 31, 2017 December 31, 2016 USD USD USD Plasma products: Distributors 174,698,620 126,381,596 120,297,097 Hospitals and inoculation centers 179,310,367 194,825,956 188,693,648 354,008,987 321,207,552 308,990,745 Placenta Polypeptide: Distributors 68,157,257 49,199,288 32,178,681 Total Biopharmaceutical products 422,166,244 370,406,840 341,169,426 Biomaterial products: Distributors 42,717,750 - - Hospitals 1,993,575 - - Total Biomaterial products 44,711,325 - - Total 466,877,569 370,406,840 341,169,426 NOTE 17 – COMMITMENTS AND CONTINGENCIES Commitments As of December 31, 2018, commitments outstanding for operating lease approximated $2,129,052. As of December 31, 2018, commitments outstanding for the purchase of property, plant and equipment approximated $10,238,706. As of December 31, 2018, commitments outstanding for the purchase of plasma approximated $58,234,770. The following table sets forth the Company’s material contractual obligations as of December 31, 2018: Payments due by period Contractual Obligations Less thanone year One to two years Two to three years Three to four years Four to five years Operating lease commitment 848,731 938,551 167,378 4,095 4,095 Purchase of plasma commitment(1) 14,018,867 27,925,833 16,290,070 - - Capital commitment 9,214,835 1,023,871 - - - Total 24,082,433 29,888,255 16,457,448 4,095 4,095 (1)See Note 10. F-28 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Legal proceedings PRC Lawsuit In June 2017, an individual brought a lawsuit against Guizhou Taibang and Guizhou Eakan Investing Corp. (“Guizhou Eakan”), an entity affiliated with oneof Guizhou Taibang’s former noncontrolling shareholders, requesting repayment of RMB14,560,000 (approximately $2,121,392) and related fundpossession cost amounting to approximately RMB37,141,600 (approximately $5,411,531). The plaintiff alleged that he entered into an agreement withGuizhou Eakan in May 2007, according to which he provided RMB14,560,000 for Guizhou Eakan to satisfy Guizhou Taibang’s loan request. On February 28, 2018, the trial was set in Shanghai Pudong New Area People’s Court. In March 2018, the court dismissed the trial for lack of jurisdiction andthen transferred the trial to Shanghai No.1 Intermediate People's Court (“No.1 Court”). In January 2019, the No.1 Court held the trial and as of reporting datethe ruling is still pending. The Company does not expect the plaintiff to prevail in this trial, but the Company cannot assure that the final outcome will be in favor of Guizhou Taibang.As of December 31, 2018, Guizhou Taibang has maintained RMB14,560,000 (approximately $2,121,392) payable to Guizhou Eakan on its balance sheet. Cayman Lawsuit On August 27, 2018, the Company’s former Chairman and CEO Mr. David (Xiaoying) Gao commenced a proceeding against the Company in the GrandCourt of the Cayman Islands (the “Court”), principally seeking (a) a declaration that the private placement that was announced by the Company on August24, 2018 was invalid and void, (b) an order requiring the Company to reverse and/or rescind any transactions carried out pursuant to the private placement,and (c) an injunction to prevent further shares from being issued by the Company to the entities participating in the private placement. The private placementwas completed on September 21, 2018. On October 5, 2018, the Company made an application to the Court for dismissal of Mr. Gao’s lawsuit on the ground,among others, that Mr. Gao lacked standing to pursue the claims. On December 13, 2018, the Court granted the Company’s application and dismissed Mr.Gao’s lawsuit. On December 21, 2018, the Court granted Mr. Gao leave to appeal its December 13, 2018 order. Pursuant to the Cayman Islands Court ofAppeal Rules, Mr. Gao was required to lodge a Notice of Appeal within 14 days of being granted leave to appeal. As of reporting date, the Company has notbeen served with a Notice of Appeal or any further documents relating to this litigation. NOTE 18 – EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the periods indicated: For the Years Ended December 31, December 31, December 31, 2018 2017 2016 USD USD USD Net income attributable to China Biologic Products Holdings, Inc. 128,056,302 67,943,035 104,779,307 Earnings allocated to participating nonvested shares (3,072,170) (2,188,633) (2,987,429)Net income used in basic and diluted earnings per ordinary share 124,984,132 65,754,402 101,791,878 Weighted average shares used in computing basic earnings per ordinary share 35,304,294 27,361,561 26,848,445 Diluted effect of stock option 128,665 244,062 400,699 Weighted average shares used in computing diluted earnings per ordinary share 35,432,959 27,605,623 27,249,144 Basic earnings per ordinary share 3.54 2.40 3.79 Diluted earnings per ordinary share 3.53 2.38 3.74 F-29 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. During the years ended December 31, 2018, 2017 and 2016, no potential ordinary shares outstanding were excluded from the calculation of diluted earningsper ordinary share. NOTE 19 – CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. (PARENT COMPANY) The following represents condensed unconsolidated financial information of the Parent Company only: Condensed Balance Sheets: December 31, 2018 December 31, 2017 USD USD Cash 175,133,834 4,708,801 Time deposits 430,000,000 3,000,000 Prepayments and prepaid expenses 12,140,443 87,070 Total Current Assets 617,274,277 7,795,871 Property, plant and equipment, net 88 145 Investment in and amounts due from subsidiaries 1,139,337,487 634,245,590 Total Assets 1,756,611,852 642,041,606 Other payables and accrued expenses 4,544,071 3,559,211 Income tax payable - current 2,621,655 3,223,229 Total Current Liabilities 7,165,726 6,782,440 Income tax payable - non current 26,899,038 37,067,138 Other liabilities 497,489 - Total Liabilities 34,562,253 43,849,578 Total Shareholders’ Equity 1,722,049,599 598,192,028 Total Liabilities and Shareholders’ Equity 1,756,611,852 642,041,606 Condensed Statements of Comprehensive Income: For the Years Ended December 31, 2018 December 31, 2017 December 31, 2016 USD USD USD Equity in income of subsidiaries 132,337,339 137,099,797 124,187,590 General and administrative expenses (16,575,019) (28,879,890) (19,408,283)Other income 5,271,797 13,495 - Earnings before income tax expense 121,034,117 108,233,402 104,779,307 Income tax (benefits)/expense (7,022,185) 40,290,367 - Net Income 128,056,302 67,943,035 104,779,307 F-30 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Condensed Statements of Cash Flows: For the Years Ended December 31, 2018 December 31, 2017 December 31, 2016 USD USD USD Net cash used in operating activities (6,211,606) (3,830,330) (2,400,188)Net cash used in investing activities (404,812,895) (3,000,000) - Net cash provided by financing activities 581,449,534 - - Net increase (decrease) in cash 170,425,033 (6,830,330) (2,400,188)Cash at beginning of year 4,708,801 11,539,131 13,939,319 Cash at end of year 175,133,834 4,708,801 11,539,131 NOTE 20 – CAPITAL WITHDRAWAL BY TWO FORMER NONCONTROLLING INTEREST SHAREHOLDRERS OF GUIZHOU TAIBANG On October 26, 2016, Guizhou Taibang completed the requisite legal and administrative procedures, through which two former minority shareholders,holding a combined 15.3% equity interest in Guizhou Taibang, withdrew their respective capital contributions in Guizhou Taibang for an aggregateconsideration of RMB415,000,000 (approximately $58,091,018) pursuant to an agreement dated July 31, 2016. NOTE 21 – SEGMENT INFORMATION The Company’s principal operating segments coincide with the types of products to be sold. The products from which revenues are derived are consistentwith the reporting structure of the Company’s internal organization. The Company’s reportable segments for the year ended December 31, 2018 werebiopharmaceutical products and biomaterial products as a result of the acquisition of TianXinFu completed on January 1, 2018 as described in Note 3. TheCompany had one operating segment, biopharmaceutical products segment, which included plasma-based products and placenta polypeptide for the years of2017 and 2016. The Company’s chief operating decision-maker (“CODM”) has been identified as the chief executive officer. The CODM regularly reviews financialinformation at the reporting segment level in order to make decisions about resources to be allocated to the segments and to assess their performance. Thereare no inter-segment revenue transactions and, therefore, revenues are only generated from external customers. The accounting policies of the segments are the same as those used by the Company. Segment information for the year ended and as of December 31, 2018 are as follows: BiopharmaceuticalProducts BiomaterialProducts Total USD USD USD Year ended December 31, 2018 Sales 422,166,244 44,711,325 466,877,569 Cost of sales 141,683,089 5,104,147 146,787,236 Gross profit 280,483,155 39,607,178 320,090,333 Income from operations 128,980,355 17,192,396 146,172,751 Net income 131,561,108 16,406,007 147,967,115 Equity in income of an equity method investee 2,368,995 - 2,368,995 Interest income 13,704,954 1,796 13,706,750 Share-based compensation 23,130,570 - 23,130,570 Depreciation and Amortization 13,902,507 9,322,844 23,225,351 Income tax expense 15,353,208 2,682,972 18,036,180 Segment assets 2,095,996,321 348,885,628 2,444,881,949 Capital expenditures 35,245,016 1,471,374 36,716,390 Equity method investment 15,428,028 - 15,428,028 F-31 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Reconciliation of segment assets to consolidated total assets: December 31,2018 USD Year ended December 31, 2018 Total segment assets 2,444,881,949 Elimination of intercompany investment balances (434,903,268)Consolidated total assets 2,009,978,681 As substantially all of the Company's revenue is derived from the PRC and substantially all of the Company's long-lived assets are located in the PRC, nogeographical information is presented. In addition, revenue derived from and long-lived assets located in Cayman Islands, the Company’s country ofdomicile, are immaterial. NOTE 22 – SUBSEQUENT EVENTS PRC Legal Proceedings In January 2019, another individual who claimed to be a strategic investor of Guizhou Taibang brought a lawsuit against Guizhou Taibang, requesting toregister her alleged ownership interest in Guizhou Taibang with the local Administration for Market Regulation (“AMR”, formerly known as theAdministration of Industry and Commerce). The plaintiff alleged that she entered into an Equity Purchase Agreement with Guizhou Taibang in May 2007,according to which she paid RMB11,200,000 (approximately $1,631,840) to Guizhou Taibang in exchange for approximately 4.71% of Guizhou Taibang’sequity interests. The plaintiff and Guizhou Taibang are scheduled to exchange evidence on March 20, 2019. The Company does not expect the plaintiff to prevail in thistrial, but the Company cannot assure that the final outcome will be in favor of Guizhou Taibang. Extension to Previously Announced Share Repurchase Program On March 4, 2019, the Board of Directors of the Company approved the extension to the Company’s previously authorized $100 million share repurchaseprogram for another six months until October 31, 2019. The Company’s repurchases may be made from time to time on the open market at prevailing marketprices, in negotiated transactions off the market, in block trades or through other legally permissible means. The timing and extent of any purchases willdepend upon market conditions, the trading price of its shares and other factors, and are subject to the restrictions relating to volume, price and timing underapplicable law. F-32 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 1.1 THE COMPANIES LAW (2016 REVISION)OF THE CAYMAN ISLANDSCOMPANY LIMITED BY SHARES AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION OF CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. (Adopted by Special Resolution passed on 21 July 2017and effective on 21 July 2017) Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. THE COMPANIES LAW (2016 REVISION)OF THE CAYMAN ISLANDSCOMPANY LIMITED BY SHARES AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION OF CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. (Adopted by Special Resolution passed on 21 July 2017 and effective on 21 July 2017) 1The name of the Company is China Biologic Products Holdings, Inc. 2The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman,KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors may decide. 3The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object notprohibited by the laws of the Cayman Islands. 4The liability of each Member is limited to the amount unpaid on such Member’s shares. 5The authorised share capital of the Company is US$11,000 divided into 110,000,000 shares of a par value of US$0.0001 each, of which100,000,000 shall be Ordinary Shares and 10,000,000 shall be Preference Shares of which 10,000,000 shall be Series A Participating PreferredShares. Subject to the Statute and the Articles, the Company shall have power to redeem or purchase any of its Shares and to subdivide orconsolidate the said Shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or withoutany preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever andso that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwiseshall be subject to the powers on the part of the Company hereinbefore provided. 6The Company has power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside theCayman Islands and to be deregistered in the Cayman Islands. 7Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear the respective meanings given to them in theAmended and Restated Articles of Association of the Company. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. THE COMPANIES LAW (2016 REVISION)OF THE CAYMAN ISLANDSCOMPANY LIMITED BY SHARES AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. (Adopted by Special Resolution passed on 21 July 2017 and effective on 21 July 2017) 1Interpretation 1.1In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistenttherewith: “Articles”means these amended and restated articles of association of the Company. “Auditor”means the person for the time being performing the duties of auditor of the Company (if any). “Board” or “Board of Directors”means the board of Directors for the time being of the Company. “Company”means the above named company. “Directors”means the directors for the time being of the Company. “Dividend”means any dividend (whether interim or final) resolved to be paid on Shares pursuant to theArticles. “Electronic Record”has the same meaning as in the Electronic Transactions Law. “Electronic Transactions Law”means the Electronic Transactions Law (2003 Revision) of the Cayman Islands. “Exchange”means the NASDAQ Stock Market in the United States or any other securities exchange or othersystem on which any Shares of the Company may be listed or otherwise authorised for tradingfrom time to time. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. “Member”has the same meaning as in the Statute. “Memorandum”means the amended and restated memorandum of association of the Company. “Ordinary Resolution”means a resolution passed by a simple majority of the Members as, being entitled to do so, votein person or, where proxies are allowed, by proxy at a general meeting, and includes aunanimous written resolution. In computing the majority when a poll is demanded regard shallbe had to the number of votes to which each Member is entitled by the Articles. “Ordinary Shares”means shares in the capital of the Company of US$0.0001 nominal or par value designated asOrdinary Shares, and having the rights provided for in these Articles. “Preference Shares”means shares in the capital of the Company of US$0.0001 nominal or par value designated asPreference Shares, and having the rights provided for in these Articles. “Register of Members”means the register of Members maintained in accordance with the Statute and includes (exceptwhere otherwise stated) any branch or duplicate register of Members. “Registered Office”means the registered office for the time being of the Company. “Series A Participating Preferred Shares”means shares in the capital of the Company of US$0.0001 nominal or par value designated asSeries A Participating Preferred Shares, and having the rights provided for in these Articles. “Seal”means the common seal of the Company and includes every duplicate seal. “Securities Act”means the Securities Act of 1933 of the United States of America, as amended, or any similarfederal statute and the rules and regulations of the U.S. Securities and Exchange Commissionthereunder, all as the same shall be in effect at the time. “Share”means a share in the Company and includes a fraction of a share in the Company. “Special Resolution”has the same meaning as in the Statute, and includes a unanimous written resolution. 2Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. “Statute”means the Companies Law (2016 Revision) of the Cayman Islands. “Subscriber”means the subscriber to the Memorandum. “Treasury Share”means a Share held in the name of the Company as a treasury share in accordance with theStatute. 1.2In the Articles: (a)words importing the singular number include the plural number and vice versa; (b)words importing the masculine gender include the feminine gender; (c)words importing persons include corporations as well as any other legal or natural person; (d)“written” and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an ElectronicRecord; (e)“shall” shall be construed as imperative and “may” shall be construed as permissive; (f)references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted orreplaced; (g)any phrase introduced by the terms “including”, “include”, “in particular” or any similar expression shall be construed as illustrative andshall not limit the sense of the words preceding those terms; (h)the term “and/or” is used herein to mean both “and” as well as “or.” The use of “and/or” in certain contexts in no respects qualifies ormodifies the use of the terms “and” or “or” in others. The term “or” shall not be interpreted to be exclusive and the term “and” shall not beinterpreted to require the conjunctive (in each case, unless the context otherwise requires); (i)headings are inserted for reference only and shall be ignored in construing the Articles; (j)any requirements as to delivery under the Articles include delivery in the form of an Electronic Record; (k)any requirements as to execution or signature under the Articles including the execution of the Articles themselves can be satisfied in theform of an electronic signature as defined in the Electronic Transactions Law; 3Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (l)sections 8 and 19(3) of the Electronic Transactions Law shall not apply; (m)the term “clear days” in relation to the period of a notice means that period excluding the day when the notice is received or deemed to bereceived and the day for which it is given or on which it is to take effect; and (n)the term “holder” in relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share. 2Commencement of Business 2.1The business of the Company may be commenced as soon after incorporation of the Company as the Directors shall see fit. 2.2The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment ofthe Company, including the expenses of registration. 3Issue of Shares 3.1Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company in general meeting) and withoutprejudice to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares (includingfractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividend or other distribution, voting,return of capital or otherwise and to such persons, at such times and on such other terms as they think proper, and may also (subject to the Statuteand the Articles) vary such rights. 3.2The Company shall not issue Shares to bearer. 3.3The Directors may provide, out of the unissued Shares (other than unissued Ordinary Shares), for series of preferred shares in their absolute discretionand without approval of the existing Members. Before any preferred shares of any such series are issued, the Directors shall fix, by resolution orresolutions, the following provisions of the preferred shares thereof: (a)the designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from thepar value thereof; (b)whether the shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of suchvoting rights, which may be general or limited; (c)the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditionsand dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payableon any shares of any other class or any other series of preferred shares; 4Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (d)whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditionsof such redemption; (e)the amount or amounts payable upon preferred shares of such series upon, and the rights of the holders of such series in, a voluntary orinvoluntary liquidation, dissolution or winding up, or upon any distribution of the assets, of the Company; (f)whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to andmanner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series forretirement or other corporate purposes and the terms and provisions relative to the operation thereof; (g)whether the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series ofpreferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, ofadjusting the same, and any other terms and conditions of conversion or exchange; (h)the limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment ofdividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existingshares or shares of any other class of shares or any other series of preferred shares; (i)the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares,including additional shares of such series or of any other class of shares or any other series of preferred shares; and (j)any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations andrestrictions thereof. 3.4The powers, preferences and relative, participating, optional and other special rights of each series of preferred shares, and the qualifications,limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. All shares of any one series ofpreferred shares shall be identical in all respects with all other shares of such series, except that shares of any one series issued at different times maydiffer as to the dates from which dividends thereon shall be cumulative. 3.5The Series A Participating Preferred Shares shall rank junior to all other series of Preference Shares as to the payment of dividends and thedistribution of assets, unless the terms of any such series shall provide otherwise. The Series A Participating Preferred Shares shall not be convertibleinto Ordinary Shares. 5Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 3.6Series A Participating Preferred Shares may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractionalshares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series AParticipating Preferred Shares. 4Register of Members 4.1The Company shall maintain or cause to be maintained the Register of Members in accordance with the Statute. 4.2The Directors may determine that the Company shall maintain one or more branch registers of Members in accordance with the Statute. TheDirectors may also determine which register of Members shall constitute the principal register and which shall constitute the branch register orregisters, and to vary such determination from time to time. 5Closing Register of Members or Fixing Record Date 5.1For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members or any adjournment thereof, or Membersentitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose, theDirectors may provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed thirty calendardays. 5.2In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or arrears a date as the record date for any suchdetermination of Members entitled to notice of, or to vote at any meeting of the Members or any adjournment thereof, or for the purpose ofdetermining the Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for anyother purpose. 5.3If the Register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of, or to vote at, a meetingof Members or Members entitled to receive payment of a Dividend or other distribution, or for the determination of Members for any other purpose,the date on which notice of the meeting is sent or the date on which the relevant resolution of the Directors is passed, as the case may be, shall be therecord date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made asprovided in this Article, such determination shall apply to any adjournment thereof. 6Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 6Certificates for Shares 6.1A Member shall only be entitled to a share certificate if the Directors resolve that share certificates shall be issued. Share certificates representingShares, if any, shall be in such form as the Directors may determine. Share certificates shall be signed by one or more Directors or other personauthorised by the Directors. The Directors may authorise certificates to be issued with the authorised signature(s) affixed by mechanical process. Allcertificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificatessurrendered to the Company for transfer shall be cancelled and subject to the Articles. No new certificate shall be issued until the former certificaterepresenting a like number of relevant Shares shall have been surrendered and cancelled. 6.2All share certificates shall bear legends required under the applicable laws, including the Securities Act. 6.3The Company shall not be bound to issue more than one certificate for Shares held jointly by more than one person and delivery of a certificate toone joint holder shall be a sufficient delivery to all of them. 6.4If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on thepayment of such expenses reasonably incurred by the Company in investigating evidence, as the Directors may prescribe, and (in the case ofdefacement or wearing out) upon delivery of the old certificate. 6.5Every share certificate sent in accordance with the Articles will be sent at the risk of the Member or other person entitled to the certificate. TheCompany will not be responsible for any share certificate lost or delayed in the course of delivery. 7Transfer of Shares 7.1Subject to the rules of any Exchange on which the Shares in question may be listed and to the any rights and restrictions for the time being attachedto any Share, Shares are transferable subject to the consent of the Directors who may, in their absolute discretion, decline to register any transfer ofShares which are not fully paid up or on which the Company has a lien. 7.2The Directors may also decline to register any transfer of any share unless: (a)the instrument of transfer is lodged with the Company, accompanied by the certificate for the shares to which it relates and such otherevidence as the Board may reasonably require to show the right of the transferor to make the transfer; (i)the instrument of transfer is in respect of only one class of shares; (ii)the instrument of transfer is properly stamped, if required; (iii)in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; (iv)the shares conceded are free of any lien in favor of us; or 7Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (v)a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as the Board mayfrom time to time require, is paid to the Company in respect thereof. (b)If the Directors refuse to register a transfer they shall, within two months after the date on which the instrument of transfer was lodged, sendto each of the transferor and the transferee notice of such refusal. 7.3The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, besuspended and the register closed at such times and for such periods as the Board may from time to time determine, provided, however, that theregistration of transfers shall not be suspended nor the register closed for more than 30 days in any year. 7.4The instrument of transfer of any Share shall be in writing and shall be executed by or on behalf of the transferor (and if the Directors so require,signed by or on behalf of the transferee). The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered inthe Register of Members. 8Redemption, Repurchase and Surrender of Shares 8.1Subject to the provisions of the Statute the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of theMember or the Company. The redemption of such Shares shall be effected in such manner and upon such other terms as the Directors, or theMembers by Special Resolution, may determine before the issue of the Shares. The Series A Participating Preferred Shares shall not be redeemable. 8.2Subject to the provisions of the Statute, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on suchother terms as the Directors may agree with the relevant Member, or as otherwise authorised by these Articles. Any Series A Participating PreferredShares purchased or otherwise acquired by the Company in any manner whatsoever shall be cancelled promptly after the purchase or acquisitionthereof, and upon their cancellation become authorised but unissued Preference Shares and may be reissued as part of a new series of PreferenceShares to be created by resolution or resolutions of the Board, subject to the conditions and restrictions on issuance set forth in the Articles or asotherwise required by law. 8.3The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Statute, including outof capital. 8.4The Directors may accept the surrender for no consideration of any fully paid Share. 8Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 9Treasury Shares 9.1The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share. 9.2The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, withoutlimitation, for nil consideration). 10Variation of Rights of Shares 10.1If at any time the share capital of the Company is divided into different classes of Shares, all or any of the rights attached to any class (unlessotherwise provided by the terms of issue of the Shares of that class) may, whether or not the Company is being wound up, be varied without theconsent of the holders of the issued Shares of that class where such variation is considered by the Directors not to have a material adverse effect uponsuch rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issuedShares of that class, or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of theholders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such variation may not havea material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such meeting all the provisions of the Articlesrelating to general meetings shall apply mutatis mutandis, except that the necessary quorum shall be one person holding or representing by proxy atleast one third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll. 10.2For the purposes of a separate class meeting, the Directors may treat two or more or all the classes of Shares as forming one class of Shares if theDirectors consider that such class of Shares would be affected in the same way by the proposals under consideration, but in any other case shall treatthem as separate classes of Shares. 10.3The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly providedby the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith. 11Commission on Sale of Shares The Company may, in so far as the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe(whether absolutely or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Suchcommissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue ofShares pay such brokerage as may be lawful. 9Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 12Non Recognition of Trusts The Company shall not be bound by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interestin any Share, or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an absoluteright to the entirety thereof in the holder. 13Lien on Shares 13.1The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not) registered in the name of a Member (whether solelyor jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Member or hisestate, either alone or jointly with any other person, whether a Member or not, but the Directors may at any time declare any Share to be wholly or inpart exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company’s lienthereon. The Company’s lien on a Share shall also extend to any amount payable in respect of that Share. 13.2The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, if a sum in respect of which the lienexists is presently payable, and is not paid within fourteen clear days after notice has been received or deemed to have been received by the holderof the Shares, or to the person entitled to it in consequence of the death or bankruptcy of the holder, demanding payment and stating that if thenotice is not complied with the Shares may be sold. 13.3To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer of the Shares sold to, or in accordancewith the directions of, the purchaser. The purchaser or his nominee shall be registered as the holder of the Shares comprised in any such transfer, andhe shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity inthe sale or the exercise of the Company’s power of sale under the Articles. 13.4The net proceeds of such sale after payment of costs, shall be applied in payment of such part of the amount in respect of which the lien exists as ispresently payable and any balance shall (subject to a like lien for sums not presently payable as existed upon the Shares before the sale) be paid tothe person entitled to the Shares at the date of the sale. 14Call on Shares 14.1Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon the Members in respect of any monies unpaid ontheir Shares (whether in respect of par value or premium), and each Member shall (subject to receiving at least fourteen clear days’ notice specifyingthe time or times of payment) pay to the Company at the time or times so specified the amount called on the Shares. A call may be revoked orpostponed, in whole or in part, as the Directors may determine. A call may be required to be paid by instalments. A person upon whom a call is madeshall remain liable for calls made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made. 10Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 14.2A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed. 14.3The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof. 14.4If a call remains unpaid after it has become due and payable, the person from whom it is due shall pay interest on the amount unpaid from the day itbecame due and payable until it is paid at such rate as the Directors may determine (and in addition all expenses that have been incurred by theCompany by reason of such non-payment), but the Directors may waive payment of the interest or expenses wholly or in part. 14.5An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on account of the par value of the Share or premium orotherwise, shall be deemed to be a call and if it is not paid all the provisions of the Articles shall apply as if that amount had become due andpayable by virtue of a call. 14.6The Directors may issue Shares with different terms as to the amount and times of payment of calls, or the interest to be paid. 14.7The Directors may, if they think fit, receive an amount from any Member willing to advance all or any part of the monies uncalled and unpaid uponany Shares held by him, and may (until the amount would otherwise become payable) pay interest at such rate as may be agreed upon between theDirectors and the Member paying such amount in advance. 14.8No such amount paid in advance of calls shall entitle the Member paying such amount to any portion of a Dividend or other distribution payable inrespect of any period prior to the date upon which such amount would, but for such payment, become payable. 15Forfeiture of Shares 15.1If a call or instalment of a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not lessthan fourteen clear days’ notice requiring payment of the amount unpaid together with any interest which may have accrued and any expensesincurred by the Company by reason of such non-payment. The notice shall specify where payment is to be made and shall state that if the notice isnot complied with the Shares in respect of which the call was made will be liable to be forfeited. 15.2If the notice is not complied with, any Share in respect of which it was given may, before the payment required by the notice has been made, beforfeited by a resolution of the Directors. Such forfeiture shall include all Dividends, other distributions or other monies payable in respect of theforfeited Share and not paid before the forfeiture. 11Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 15.3A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time beforea sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal aforfeited Share is to be transferred to any person the Directors may authorise some person to execute an instrument of transfer of the Share in favourof that person. 15.4A person any of whose Shares have been forfeited shall cease to be a Member in respect of them and shall surrender to the Company for cancellationthe certificate for the Shares forfeited and shall remain liable to pay to the Company all monies which at the date of forfeiture were payable by him tothe Company in respect of those Shares together with interest at such rate as the Directors may determine, but his liability shall cease if and when theCompany shall have received payment in full of all monies due and payable by him in respect of those Shares. 15.5A certificate in writing under the hand of one Director or officer of the Company that a Share has been forfeited on a specified date shall beconclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share. The certificate shall (subject to the executionof an instrument of transfer) constitute a good title to the Share and the person to whom the Share is sold or otherwise disposed of shall not be boundto see to the application of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedingsin reference to the forfeiture, sale or disposal of the Share. 15.6The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum which, by the terms of issue of a Share, becomespayable at a fixed time, whether on account of the par value of the Share or by way of premium as if it had been payable by virtue of a call duly madeand notified. 16Transmission of Shares 16.1If a Member dies the survivor or survivors (where he was a joint holder) or his legal personal representatives (where he was a sole holder), shall be theonly persons recognised by the Company as having any title to his Shares. The estate of a deceased Member is not thereby released from anyliability in respect of any Share, for which he was a joint or sole holder. 16.2Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other waythan by transfer) may, upon such evidence being produced as may be required by the Directors, elect, by a notice in writing sent by him to theCompany, either to become the holder of such Share or to have some person nominated by him registered as the holder of such Share. If he elects tohave another person registered as the holder of such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, ineither case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevantMember before his death or bankruptcy or liquidation or dissolution, as the case may be. 12Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 16.3A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution of a Member (or in any other case than bytransfer) shall be entitled to the same Dividends, other distributions and other advantages to which he would be entitled if he were the holder of suchShare. However, he shall not, before becoming a Member in respect of a Share, be entitled in respect of it to exercise any right conferred bymembership in relation to general meetings of the Company and the Directors may at any time give notice requiring any such person to elect eitherto be registered himself or to have some person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, havethe same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before hisdeath or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is not complied with withinninety days of being received or deemed to be received (as determined pursuant to the Articles) the Directors may thereafter withhold payment of allDividends, other distributions, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. 17Amendments of Memorandum and Articles of Association and Alteration of Capital 17.1The Company may by Ordinary Resolution: (a)increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such rights, priorities and privileges annexedthereto, as the Company in general meeting may determine; (b)consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares; (c)convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares of any denomination; (d)by subdivision of its existing Shares or any of them divide the whole or any part of its share capital into Shares of smaller amount than isfixed by the Memorandum or into Shares without par value; and (e)cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken or agreed to be taken by any person anddiminish the amount of its share capital by the amount of the Shares so cancelled. 17.2All new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of the Articles withreference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. 17.3Subject to the provisions of the Statute and the provisions of the Articles as regards the matters to be dealt with by Ordinary Resolution, theCompany may by Special Resolution: (a)change its name; (b)alter or add to the Articles; 13Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (c)alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and (d)reduce its share capital or any capital redemption reserve fund. 17.4At any time when any Series A Participating Preferred Shares are issued and outstanding, these Articles shall not be amended in any manner thatwould materially alter or change the powers, preferences or special rights of the Series A Participating Preferred Shares so as to affect them adverselywithout the affirmative vote of the holders of at least two-thirds of the issued and outstanding Series A Participating Preferred Shares, votingseparately as a class. 18Offices and Places of Business Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Companymay, in addition to its Registered Office, maintain such other offices or places of business as the Directors determine. 19General Meetings 19.1All general meetings other than annual general meetings shall be called extraordinary general meetings. 19.2The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold a general meeting as its annual general meeting,and shall specify the meeting as such in the notices calling it. Any annual general meeting shall be held at such time and place as the Directors shallappoint. At these meetings the report of the Directors (if any) shall be presented. 19.3The Directors may call general meetings, and they shall on a Members’ requisition forthwith proceed to convene an extraordinary general meeting ofthe Company. An extraordinary general meeting may also be called by the Board, the chairman of the Board or the President of the Company. 19.4A Members’ requisition is a requisition of Members holding at the date of deposit of the requisition not less than twenty-five per cent. in par value ofthe issued Shares which as at that date carry the right to vote at general meetings of the Company. 19.5The Members’ requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office, andmay consist of several documents in like form each signed by one or more requisitionists. 19.6If there are no Directors as at the date of the deposit of the Members’ requisition or if the Directors do not within twenty-one days from the date of thedeposit of the Members’ requisition duly proceed to convene a general meeting to be held within a further twenty-one days, the requisitionists, orany of them representing more than one-half of the total voting rights of all of the requisitionists, may themselves convene a general meeting, butany meeting so convened shall be held no later than the day which falls three months after the expiration of the said twenty-one day period. 14Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 19.7A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which generalmeetings are to be convened by Directors. 20Notice of General Meetings 20.1At least ten clear days’ notice (but not more than sixty clear days’ notice) shall be given of any general meeting. Every notice shall specify the place,the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and shall be given in the mannerhereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall,whether or not the notice specified in this Article has been given and whether or not the provisions of the Articles regarding general meetings havebeen complied with, be deemed to have been duly convened if it is so agreed: (a)in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat; and (b)in the case of an extraordinary general meeting, by a majority in number of the Members having a right to attend and vote at the meeting,together holding not less than ninety five per cent. in par value of the Shares giving that right. 20.2The accidental omission to give notice of a general meeting to, or the non receipt of notice of a general meeting by, any person entitled to receivesuch notice shall not invalidate the proceedings of that general meeting. 21Proceedings at General Meetings 21.1No business shall be transacted at any general meeting unless a quorum is present. The holders of Shares being not less than an aggregate of one-third of all Shares in issue present in person or by proxy and entitled to vote shall be a quorum for all purposes. 21.2A person may participate at a general meeting by conference telephone or other communications equipment by means of which all the personsparticipating in the meeting can communicate with each other. Participation by a person in a general meeting in this manner is treated as presence inperson at that meeting. 21.3Notwithstanding the other provisions of these Articles, Members holding a majority of the Shares entitled to vote at the general meeting, present inperson or represented by proxy, whether or not a quorum is present, shall have power to adjourn the meeting from time to time, without notice otherthan announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present orrepresented, any business may be transacted which might have been transacted at the meeting as originally notified. 15Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 21.4A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by or on behalf of all of the Members for the time beingentitled to receive notice of and to attend and vote at general meetings (or, being corporations or other non-natural persons, signed by their dulyauthorised representatives) shall be as valid and effective as if the resolution had been passed at a general meeting of the Company duly convenedand held. 21.5If a quorum is not present within half an hour from the time appointed for the meeting to commence or if during such a meeting a quorum ceases tobe present, the meeting, if convened upon a Members’ requisition, shall be dissolved and in any other case it shall stand adjourned to the same dayin the next week at the same time and/or place or to such other day, time and/or place as the Directors may determine, and if at the adjournedmeeting a quorum is not present within half an hour from the time appointed for the meeting to commence, the Members present shall be a quorum. 21.6The Directors may, at any time prior to the time appointed for the meeting to commence, appoint any person to act as chairman of a general meetingof the Company or, if the Directors do not make any such appointment, the chairman, if any, of the Board of Directors shall preside as chairman atsuch general meeting. If there is no such chairman, or if he shall not be present within fifteen minutes after the time appointed for the meeting tocommence, or is unwilling to act, the Directors present shall elect one of their number to be chairman of the meeting. 21.7If no Director is willing to act as chairman or if no Director is present within fifteen minutes after the time appointed for the meeting to commence,the Members present shall choose one of their number to be chairman of the meeting. 21.8The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting fromtime to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at themeeting from which the adjournment took place. 21.9Any chairman of the meeting may adjourn a meeting from time to time and from place to place either: (a)with the consent of any general meeting at which a quorum is present (and shall if so directed by the meeting); or (b)without the consent of such meeting if, in his sole opinion, he considers it necessary to do so to: (i)secure the orderly conduct or proceedings of the meeting; or (ii)give all persons present in person or by proxy and having the right to speak and / or vote at such meeting, the ability to do so, 16Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment tookplace. 21.10When a general meeting is adjourned for thirty days or more, or if after the adjournment a new record date is fixed for the adjourned meeting, noticeof the adjourned meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of anadjourned meeting. 21.11A resolution put to the vote of the meeting shall be decided on a show of hands unless before, or on the declaration of the result of, the show ofhands, the chairman demands a poll, or any other Member or Members collectively present in person or by proxy (or in the case of a corporation orother non-natural person, by its duly authorised representative or proxy) and holding at least ten per cent. in par value of the Shares giving a right toattend and vote at the meeting demand a poll. 21.12Unless a poll is duly demanded and the demand is not withdrawn a declaration by the chairman that a resolution has been carried or carriedunanimously, or by a particular majority, or lost or not carried by a particular majority, an entry to that effect in the minutes of the proceedings of themeeting shall be conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favour of or against suchresolution. 21.13The demand for a poll may be withdrawn. 21.14Except on a poll demanded on the election of a chairman or on a question of adjournment, a poll shall be taken as the chairman directs, and theresult of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded. 21.15A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other questionshall be taken at such date, time and place as the chairman of the general meeting directs, and any business other than that upon which a poll hasbeen demanded or is contingent thereon may proceed pending the taking of the poll. 21.16In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall be entitled to a second or casting vote. 22Votes of Members 22.1Subject to any rights or restrictions attached to any Shares, on a show of hands every Member who (being an individual) is present in person or byproxy or, if a corporation or other non-natural person is present by its duly authorised representative or by proxy, shall have one vote and on a pollevery Member present in any such manner shall have one vote for every Ordinary Share of which he is the holder. 17Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 22.2The holders of Series A Participating Preferred Shares shall have the following voting rights: (a)Subject to the provision for adjustment hereinafter set forth, each Series A Participating Preferred Share shall entitle the holder thereof to1,000 votes on all matters submitted to a vote of the Members of the Company. In the event that the Company shall at any time after theRights Declaration Date (as defined below) (i) declare any dividend on Ordinary Shares payable in Ordinary Shares, (ii) subdivide theoutstanding Ordinary Shares or (iii) combine the outstanding Ordinary Shares into a smaller number of Shares, then in each such case thenumber of votes per share to which holders of Series A Participating Preferred Shares were entitled immediately prior to such event shall beadjusted by multiplying such number by a fraction the numerator of which is the number of Ordinary Shares outstanding immediately aftersuch event and the denominator of which is the number of Ordinary Shares that were outstanding immediately prior to such event. (b)Except as otherwise provided herein or as required by law, the holders of Series A Participating Preferred Shares and the holders of OrdinaryShares shall vote together as one class on all matters submitted to a vote of Members of the Company. (c)Except as set forth herein or as required by law, the holders of Series A Participating Preferred Shares shall have no special voting rights andtheir consent shall not be required (except to the extent that they are entitled to vote with holders of Ordinary Shares as set forth herein) fortaking any corporate action. 22.3In the case of joint holders the vote of the senior holder who tenders a vote, whether in person or by proxy (or, in the case of a corporation or othernon-natural person, by its duly authorised representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders, andseniority shall be determined by the order in which the names of the holders stand in the Register of Members. 22.4A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote, whether on a showof hands or on a poll, by his committee, receiver, curator bonis, or other person on such Member’s behalf appointed by that court, and any suchcommittee, receiver, curator bonis or other person may vote by proxy. 22.5No person shall be entitled to vote at any general meeting unless he is registered as a Member on the record date for such meeting nor unless all callsor other monies then payable by him in respect of Shares have been paid. 22.6No objection shall be raised as to the qualification of any voter except at the general meeting or adjourned general meeting at which the voteobjected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time in accordance with thisArticle shall be referred to the chairman whose decision shall be final and conclusive. 22.7On a poll or on a show of hands votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural person by itsduly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or more instruments to attendand vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall state which proxy is entitled to vote on a showof hands and shall specify the number of Shares in respect of which each proxy is entitled to exercise the related votes. 18Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 22.8On a poll, a Member holding more than one Share need not cast the votes in respect of his Shares in the same way on any resolution and thereforemay vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and,subject to the terms of the instrument appointing him, a proxy appointed under one or more instruments may vote a Share or some or all of the Sharesin respect of which he is appointed either for or against a resolution and/or abstain from voting a Share or some or all of the Shares in respect ofwhich he is appointed. 23Proxies 23.1The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor or of his attorney duly authorised inwriting, or, if the appointor is a corporation or other non natural person, under the hand of its duly authorised representative. A proxy need not be aMember. A proxy is not valid after the expiration of twelve months from its date unless otherwise provided in the proxy. 23.2The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument of proxy sent out by the Company, specify themanner by which the instrument appointing a proxy shall be deposited and the place and the time (being not later than the time appointed for thecommencement of the meeting or adjourned meeting to which the proxy relates) at which the instrument appointing a proxy shall be deposited. Inthe absence of any such direction from the Directors in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent outby the Company, the instrument appointing a proxy shall be deposited physically at the Registered Office not less than 48 hours before the timeappointed for the meeting or adjourned meeting to commence at which the person named in the instrument proposes to vote. 23.3The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed to have been duly deposited. An instrument ofproxy that is not deposited in the manner permitted, or which has not been declared to have been duly deposited by the chairman, shall be invalid. 23.4The instrument appointing a proxy may be in any usual or common form (or such other form as the Directors may approve) and may be expressed tobe for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include thepower to demand or join or concur in demanding a poll. 23.5Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal orrevocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is givenunless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before thecommencement of the general meeting, or adjourned meeting at which it is sought to use the proxy. 19Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 24Corporate Members Any corporation or other non-natural person which is a Member may in accordance with its constitutional documents, or in the absence of suchprovision by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of theCompany or of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation whichhe represents as the corporation could exercise if it were an individual Member. 25Shares that May Not be Voted Shares in the Company that are beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not becounted in determining the total number of outstanding Shares at any given time. 26Directors The Board of Directors shall consist of no more than nine members, the exact number of which shall be fixed from time to time by resolution of theMembers or of the Board of Directors, subject to the provisions of these Articles. The first Directors of the Company shall be determined in writingby, or appointed by a resolution of, the Subscriber. 27Powers of Directors 27.1Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions given by Special Resolution, the business of theCompany shall be managed by the Directors who may exercise all the powers of the Company. No alteration of the Memorandum or Articles and nosuch direction shall invalidate any prior act of the Directors which would have been valid if that alteration had not been made or that direction hadnot been given. A duly convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors. 27.2All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments and all receipts for monies paid to theCompany shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall determine byresolution. 27.3The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salariedoffice or place of profit with the Company or to his widow or dependants and may make contributions to any fund and pay premiums for thepurchase or provision of any such gratuity, pension or allowance. 27.4The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets (presentand future) and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whetheroutright or as security for any debt, liability or obligation of the Company or of any third party. 20Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 28Appointment and Removal of Directors 28.1The Company may by Ordinary Resolution appoint any person to be a Director or may by Ordinary Resolution remove any Director. 28.2(a)If at any time dividends on any Series A Participating Preferred Shares shall be in arrears in an amount equal to six quarterly dividendsthereon, then the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) that shall extenduntil such time as all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend periodon all Series A Participating Preferred Shares then outstanding shall have been declared and paid or set apart for payment. During eachdefault period, all holders of Preference Shares (including holders of Series A Participating Preferred Shares) with dividends in arrears in anamount equal to six quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two Directors. (b)During any default period, such voting right of the holders of Series A Participating Preferred Shares may be exercised initially at anextraordinary general meeting called pursuant to subparagraph (c) of this Article 28.2 or at any annual meeting of Members, and thereafterat annual meetings of Members; provided, however, that such voting shall not be exercised unless the holders of at least one-third innumber of Preference Shares issued and outstanding shall be present in person or by proxy. The absence of a quorum of the holders ofOrdinary Shares shall not affect the exercise by the holders of Preference Shares of such voting right. At any meeting at which the holders ofPreference Shares shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, toelect Directors to fill such vacancies, if any, in the Board as may then exist up to two Directors or, if such right is exercised at an annualmeeting of Members, to elect two Directors. After the holders of Preference Shares shall have exercised their right to elect Directors in anydefault period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of theholders of Preference Shares as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with theSeries A Participating Preferred Shares. (c)Unless the holders of Preference Shares shall, during an existing default period, have previously exercised their right to elect Directors, theCompany shall, by action of the Chairman of the Board, the Chief Executive Officer or the majority of the Directors in accordance with theArticles, promptly call a special meeting of the holders of Preference Shares for such purpose. Notice of such meeting and of any annualmeeting at which holders of Preference Shares are entitled to vote pursuant to this paragraph (c) shall be given to each holder of record ofPreference Shares by mailing a copy of such notice to such holder at such holder’s last address as the same appears on the register ofmembers of the Company. Notwithstanding the provisions of this paragraph (c), no such special meeting shall be called during the periodwithin 60 days immediately preceding the date fixed for the next annual meeting of the Members. 21Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (d)In any default period, the holders of Ordinary Shares and other classes of Shares of the Company, if applicable, shall continue to be entitledto elect the Directors until the holders of Preference Shares shall have exercised their right to elect two Directors voting as a class, after theexercise of which right (A) the Directors so elected by the holders of Preference Shares shall continue in office until their successors shallhave been elected by such holders or until the expiration of the default period, and (B) any vacancy in the Board may (except as providedin paragraph (b) of this Article 28.2) be filled by vote of a majority of the remaining Directors theretofore elected by the holders of the classof Shares that elected the Director whose office shall have become vacant. References in this Article 28.2 to Directors elected by the holdersof a particular class of Shares shall include Directors elected by such Directors to fill vacancies as provided in clause (B) of the foregoingsentence. (e)Immediately upon the expiration of a default period, (A) the right of the holders of Preference Shares as a class to elect Directors shall cease,(B) the term of any Directors elected by the holders of Preference Shares as a class shall terminate and (C) the number of Directors shall besuch number as may be provided for in the Articles irrespective of any increase made pursuant to the provisions of paragraph (b) of thisArticle 28.2 (such number being subject, however, to change thereafter in any manner provided by law or in the Articles). Any vacancies inthe Board effected by the provisions of clauses (B) and (C) in the preceding sentence may be filled by a majority of the remaining Directors. 28.3Subject to the rights of holders of any series of Preference Shares with respect to the election of Directors, the Directors shall be divided into threeclasses as nearly equal in number as is practicable, hereby designated Class I, Class II and Class III. Directors shall be assigned to each class inaccordance with a resolution or resolutions adopted by the Board of Directors. At the 2017 annual general meeting of Members, the term of office ofthe Class II Directors shall expire and Class II Directors shall be elected for a full term of three (3) years. At the 2018 annual general meeting ofMembers, the term of office of the Class III Directors shall expire and Class III Directors shall be elected for a full term of three (3) years. At the 2019annual general meeting of Members, the term of office of the Class I Directors shall expire and Class I Directors shall be elected for a full term ofthree (3) years. At each succeeding annual general meeting of Members, Directors shall be elected for a full term of three (3) years to succeed theDirectors of the class whose terms expire at such annual general meeting. Notwithstanding the foregoing provisions of this Article, each Directorshall hold office until the expiration of his term, until his successor shall have been duly elected and qualified or until his earlier death, resignationor removal. No decrease in the number of Directors constituting the Board shall shorten the term of any incumbent Director. Subject to the rights ofholders of any series of Preference Shares with respect to the election of Directors, if the number of Directors that constitutes the Board of Directors ischanged, any newly created directorships or decrease in directorships shall be so apportioned by the Board of Directors among the classes as to makeall classes as nearly equal in number as is practicable, provided that no decrease in the number of Directors constituting the Board of Directors shallshorten the term of any incumbent Director. Any additional Director of any class elected to fill a vacancy resulting from an increase in such classshall hold office for a term that shall coincide with the remaining term of that class. A Director shall hold office until the annual meeting for the yearin which his or her term expires and until his or her successor shall be elected, subject, however, to his or her prior death, resignation, retirement orremoval from office. Subject to any additional requirement set forth in the Company’s corporate governance guidelines, in any election of Directorsheld at a meeting of Members, the persons receiving a plurality of the votes cast by the Members entitled to vote thereon at such meeting who arepresent or represented by proxy, up to the number of Directors to be elected in such election, shall be deemed elected. 22Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 28.4The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional Director provided that the appointment does notcause the number of Directors to exceed any number fixed by or in accordance with the Articles as the maximum number of Directors. 29Vacation of Office of Director The office of a Director shall be vacated if: (a)the Director gives notice in writing to the Company that he resigns the office of Director; or (b)the Director absents himself (for the avoidance of doubt, without being represented by proxy or an alternate Director appointed by him)from three consecutive meetings of the Board of Directors without special leave of absence from the Directors, and the Directors pass aresolution that he has by reason of such absence vacated office; or (c)the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors generally; or (d)the Director is found to be or becomes of unsound mind; or (e)all of the other Directors (being not less than two in number) determine that he should be removed as a Director, either by a resolutionpassed by all of the other Directors at a meeting of the Directors duly convened and held in accordance with the Articles or by a resolutionin writing signed by all of the other Directors. 30Proceedings of Directors 30.1The quorum for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed shall be a majority of the Board ofDirectors if there are three or more Directors, two if there are two Directors and one if there is only one Director. A person who holds office as analternate Director shall, if his appointor is not present, be counted in the quorum. A Director who also acts as an alternate Director shall, if hisappointor is not present, count twice towards the quorum. If a quorum shall not be present at any meeting of the Board of Directors, the Directorspresent thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. 23Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 30.2Subject to the provisions of the Articles, the Directors may regulate their proceedings as they think fit. Questions arising at any meeting shall bedecided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote. A Director who is also analternate Director shall be entitled in the absence of his appointor to a separate vote on behalf of his appointor in addition to his own vote. 30.3A person may participate in a meeting of the Directors or any committee of Directors by conference telephone or other communications equipmentby means of which all the persons participating in the meeting can communicate with each other at the same time. Participation by a person in ameeting in this manner is treated as presence in person at that meeting. Unless otherwise determined by the Directors the meeting shall be deemed tobe held at the place where the chairman is located at the start of the meeting. 30.4A resolution in writing (in one or more counterparts) signed by all the Directors or all the members of a committee of the Directors or, in the case of aresolution in writing relating to the removal of any Director or the vacation of office by any Director, all of the Directors other than the Director whois the subject of such resolution (an alternate Director being entitled to sign such a resolution on behalf of his appointor and if such alternateDirector is also a Director, being entitled to sign such resolution both on behalf of his appointer and in his capacity as a Director) shall be as validand effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held. 30.5A Director or alternate Director, the Chief Executive Officer or the President of the Company may, or other officer of the Company on the directionof a Director or alternate Director shall, call a meeting of the Directors by at least two days’ notice in writing to every Director and alternate Directorwhich notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors (or their alternates) eitherat, before or after the meeting is held. To any such notice of a meeting of the Directors all the provisions of the Articles relating to the giving ofnotices by the Company to the Members shall apply mutatis mutandis. 30.6The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding any vacancy in their body, but if and so longas their number is reduced below the number fixed by or pursuant to the Articles as the necessary quorum of Directors the continuing Directors orDirector may act for the purpose of increasing the number of Directors to be equal to such fixed number, or of summoning a general meeting of theCompany, but for no other purpose. 30.7The Directors may elect a chairman of their board and determine the period for which he is to hold office; but if no such chairman is elected, or if atany meeting the chairman is not present within five minutes after the time appointed for the meeting to commence, the Directors present may chooseone of their number to be chairman of the meeting. 24Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 30.8All acts done by any meeting of the Directors or of a committee of the Directors (including any person acting as an alternate Director) shall,notwithstanding that it is afterwards discovered that there was some defect in the appointment of any Director or alternate Director, and/or that theyor any of them were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been dulyappointed and/or not disqualified to be a Director or alternate Director and/or had not vacated their office and/or had been entitled to vote, as thecase may be. 30.9A Director but not an alternate Director may be represented at any meetings of the Board of Directors by a proxy appointed in writing by him. Theproxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that of the appointing Director. 31Presumption of Assent A Director or alternate Director who is present at a meeting of the Board of Directors at which action on any Company matter is taken shall bepresumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his writtendissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward suchdissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director oralternate Director who voted in favour of such action. 32Directors’ Interests 32.1A Director or alternate Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction withhis office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine. 32.2A Director or alternate Director may act by himself or by, through or on behalf of his firm in a professional capacity for the Company and he or hisfirm shall be entitled to remuneration for professional services as if he were not a Director or alternate Director. 32.3A Director or alternate Director may be or become a director or other officer of or otherwise interested in any company promoted by the Company orin which the Company may be interested as a shareholder, a contracting party or otherwise, and no such Director or alternate Director shall beaccountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such othercompany. 32.4No person shall be disqualified from the office of Director or alternate Director or prevented by such office from contracting with the Company,either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company inwhich any Director or alternate Director shall be in any way interested be or be liable to be avoided, nor shall any Director or alternate Director socontracting or being so interested be liable to account to the Company for any profit realised by or arising in connection with any such contract ortransaction by reason of such Director or alternate Director holding office or of the fiduciary relationship thereby established. A Director (or hisalternate Director in his absence) shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the natureof the interest of any Director or alternate Director in any such contract or transaction shall be disclosed by him at or prior to its consideration andany vote thereon. 25Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 32.5A general notice that a Director or alternate Director is a shareholder, director, officer or employee of any specified firm or company and is to beregarded as interested in any transaction with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution in respectof a contract or transaction in which he has an interest, and after such general notice it shall not be necessary to give special notice relating to anyparticular transaction. 33Minutes The Directors shall cause minutes to be made in books kept for the purpose of recording all appointments of officers made by the Directors, allproceedings at meetings of the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including thenames of the Directors or alternate Directors present at each meeting. 34Delegation of Directors’ Powers 34.1The Directors may delegate any of their powers, authorities and discretions, including the power to sub-delegate, to any committee consisting of oneor more Directors. They may also delegate to any managing Director or any Director holding any other executive office such of their powers,authorities and discretions as they consider desirable to be exercised by him provided that an alternate Director may not act as managing Directorand the appointment of a managing Director shall be revoked forthwith if he ceases to be a Director. Any such delegation may be made subject toany conditions the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may berevoked or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the Articlesregulating the proceedings of Directors, so far as they are capable of applying. 34.2The Directors may establish any committees, local boards or agencies or appoint any person to be a manager or agent for managing the affairs of theCompany and may appoint any person to be a member of such committees, local boards or agencies. Any such appointment may be made subject toany conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers and any such appointment may berevoked or altered by the Directors. Subject to any such conditions, the proceedings of any such committee, local board or agency shall be governedby the Articles regulating the proceedings of Directors, so far as they are capable of applying. 34.3The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company on such conditions as the Directors maydetermine, provided that the delegation is not to the exclusion of their own powers and may be revoked by the Directors at any time. 26Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 34.4The Directors may by power of attorney or otherwise appoint any company, firm, person or body of persons, whether nominated directly or indirectlyby the Directors, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (notexceeding those vested in or exercisable by the Directors under the Articles) and for such period and subject to such conditions as they may think fit,and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with anysuch attorneys or authorised signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegateall or any of the powers, authorities and discretions vested in him. 34.5The Directors may appoint such officers of the Company (including, for the avoidance of doubt and without limitation, any secretary) as theyconsider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removalas the Directors may think fit. Unless otherwise specified in the terms of his appointment an officer of the Company may be removed by resolutionof the Directors or Members. An officer of the Company may vacate his office at any time if he gives notice in writing to the Company that heresigns his office. 35Alternate Directors 35.1Any Director (but not an alternate Director) may by writing appoint any other Director, or any other person willing to act, to be an alternate Directorand by writing may remove from office an alternate Director so appointed by him. 35.2An alternate Director shall be entitled to receive notice of all meetings of Directors and of all meetings of committees of Directors of which hisappointor is a member, to attend and vote at every such meeting at which the Director appointing him is not personally present, to sign any writtenresolution of the Directors, and generally to perform all the functions of his appointor as a Director in his absence. 35.3An alternate Director shall cease to be an alternate Director if his appointor ceases to be a Director. 35.4Any appointment or removal of an alternate Director shall be by notice to the Company signed by the Director making or revoking the appointmentor in any other manner approved by the Directors. 35.5Subject to the provisions of the Articles, an alternate Director shall be deemed for all purposes to be a Director and shall alone be responsible for hisown acts and defaults and shall not be deemed to be the agent of the Director appointing him. 36No Minimum Shareholding The Company in general meeting may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholdingqualification is fixed a Director is not required to hold Shares. 27Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 37Remuneration of Directors 37.1Directors shall not be entitled to any stated salary for their services unless approved by resolution of the Members or the Board of Directors. But byresolution of the Board of Directors, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meetingof the Board of Directors or any meeting of a committee of Directors. No provision of these Articles shall be construed to preclude any Director fromserving the Company in any other capacity and receiving compensation therefore. 37.2The Directors may by resolution approve additional remuneration to any Director for any services which in the opinion of the Directors go beyondhis ordinary routine work as a Director. Any fees paid to a Director who is also counsel, attorney or solicitor to the Company, or otherwise serves it ina professional capacity shall be in addition to his remuneration as a Director. 38Seal 38.1The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority of the Directors or of a committee of theDirectors authorised by the Directors. Every instrument to which the Seal has been affixed shall be signed by at least one person who shall be either aDirector or some officer of the Company or other person appointed by the Directors for the purpose. 38.2The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of thecommon Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used. 38.3A Director or officer, representative or attorney of the Company may without further authority of the Directors affix the Seal over his signature aloneto any document of the Company required to be authenticated by him under seal or to be filed with the Registrar of Companies in the CaymanIslands or elsewhere wheresoever. 39Dividends, Distributions and Reserve 39.1Subject to the Statute and this Article and except as otherwise provided by the rights attached to any Shares, the Directors may resolve to payDividends and other distributions on Shares in issue and authorise payment of the Dividends or other distributions out of the funds of the Companylawfully available therefor. A Dividend shall be deemed to be an interim Dividend unless the terms of the resolution pursuant to which the Directorsresolve to pay such Dividend specifically state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid exceptout of the realised or unrealised profits of the Company, out of the share premium account or as otherwise permitted by the Statute. 39.2Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions shall be paid according to the par value ofthe Shares that a Member holds. If any Share is issued on terms providing that it shall rank for Dividend as from a particular date, that Share shallrank for Dividend accordingly. 28Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 39.3(a) Subject to Article 39.4 and to the prior and superior rights of the holders of any shares of any series of Preference Shares ranking prior andsuperior to the Series A Participating Preferred Shares with respect to dividends, the holders of Series A Participating Preferred Shares shall beentitled to receive, when, as and if declared by the Board out of funds legally available for the purpose, quarterly dividends payable in cash on thelast day of March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”),commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Participating PreferredShares, in an amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00 and (ii) subject to Article 39.4, 1,000 times the aggregateper share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or otherdistributions other than a dividend payable in Ordinary Shares or a subdivision of the outstanding Ordinary Shares (by reclassification or otherwise),declared on the Ordinary Shares since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly DividendPayment Date, since the first issuance of any share or fraction of a share of Series A Participating Preferred Shares. (b) The Company shall declare a dividend or distribution on the Series A Participating Preferred Shares as provided in paragraph (a) aboveimmediately after it declares a dividend or distribution on the Ordinary Shares (other than a dividend payable in shares of Ordinary Shares);provided, however, that, in the event that no dividend or distribution shall have been declared on the Ordinary Shares during the period between anyQuarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series AParticipating Preferred Shares shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (c) Dividends shall begin to accrue and be cumulative on outstanding Series A Participating Preferred Shares from the Quarterly Dividend PaymentDate next preceding the date of issue of such shares of Series A Participating Preferred Shares, unless the date of issue of such shares is prior to therecord date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of suchshares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares ofSeries A Participating Preferred Shares entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of whichevents such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall notbear interest. Dividends paid on the Series A Participating Preferred Shares in an amount less than the total amount of such dividends at the timeaccrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Boardmay fix a record date for the determination of holders of shares of Series A Participating Preferred Shares entitled to receive payment of a dividend ordistribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof. 29Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 39.4In the event that the Company shall at any time after the issuance of any Series A Participating Preferred Shares (the “Rights Declaration Date”) (a)declare any dividend on the Ordinary Shares, payable in shares of Ordinary Shares, (b) subdivide the outstanding Ordinary Shares or (c) combine theoutstanding Ordinary Shares into a smaller number of Shares, then in each such case the Company shall simultaneously effect a proportionaladjustment to the number of outstanding shares of Series A Participating Preferred Shares by an amount the numerator of which is the number ofshares of Ordinary Shares outstanding immediately after such event and the denominator of which is the number of shares of Ordinary Shares thatwere outstanding immediately prior to such event. 39.5The Company shall not declare any dividend on, make any distribution on, or redeem or purchase or otherwise acquire for consideration anyOrdinary Shares after the first issuance of a share or fraction of a share of Series A Participating Preferred Shares unless concurrently therewith it shalldeclare a dividend on the Series A Participating Preferred Shares as required by Article 39.3. 39.6Whenever quarterly dividends or other dividends or distributions payable on the Series A Participating Preferred Shares as provided in Article 39.3are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on Series A Participating PreferredShares outstanding shall have been paid in full, the Company shall not: (a)declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any Sharesranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Participating Preferred Shares; (b)declare or pay dividends, or make any other distributions, on any Shares ranking on a parity (either as to dividends or upon liquidation,dissolution or winding up) with the Series A Participating Preferred Shares, except dividends paid ratably on the Series A ParticipatingPreferred Shares and all such parity Shares on which dividends are payable or in arrears in proportion to the total amounts to which theholders of all such Shares are then entitled; (c)redeem or purchase or otherwise acquire for consideration Shares ranking on a parity (either as to dividends or upon liquidation, dissolutionor winding up) with the Series A Participating Preferred Shares; provided, however, that the Company may at any time redeem, purchase orotherwise acquire shares of any such parity Shares in exchange for Shares ranking junior (either as to dividends or upon dissolution,liquidation or winding up) to the Series A Participating Preferred Shares; or (d)redeem or purchase or otherwise acquire for consideration any shares of Series A Participating Preferred Shares, or any Shares ranking on aparity with the Series A Participating Preferred Shares, except in accordance with a purchase offer made in writing or by publication (asdetermined by the Board) to all holders of such Shares upon such terms as the Board, after consideration of the respective annual dividendrates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair andequitable treatment among the respective series or classes. 30Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 39.7The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any Shares of the Company unlessthe Company could, pursuant to Article 39.5, purchase or otherwise acquire such Shares at such time and in such manner. 39.8The Directors may deduct from any Dividend or other distribution payable to any Member all sums of money (if any) then payable by him to theCompany on account of calls or otherwise. 39.9The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the distribution of specific assets and in particular (butwithout limitation) by the distribution of shares, debentures, or securities of any other company or in any one or more of such ways and where anydifficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Sharesand may fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to anyMembers upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in suchmanner as may seem expedient to the Directors. 39.10Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions may be paid in any currency. The Directorsmay determine the basis of conversion for any currency conversions that may be required and how any costs involved are to be met. 39.11The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums as they think proper as a reserve or reserves whichshall, at the discretion of the Directors, be applicable for any purpose of the Company and pending such application may, at the discretion of theDirectors, be employed in the business of the Company. 39.12Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares may be paid in any manner as the Directors maydetermine, including by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or, inthe case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such person and to such addressas such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it issent. Any one of two or more joint holders may give effectual receipts for any Dividends, other distributions, bonuses, or other monies payable inrespect of the Share held by them as joint holders. 39.13No Dividend or other distribution shall bear interest against the Company. 39.14Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed after six months from the date on which suchDividend or other distribution becomes payable may, in the discretion of the Directors, be paid into a separate account in the Company’s name,provided that the Company shall not be constituted as a trustee in respect of that account and the Dividend or other distribution shall remain as adebt due to the Member. Any Dividend or other distribution which remains unclaimed after a period of six years from the date on which suchDividend or other distribution becomes payable shall be forfeited and shall revert to the Company. 31Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 40Capitalisation The Directors may at any time capitalise any sum standing to the credit of any of the Company’s reserve accounts or funds (including the sharepremium account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available fordistribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members had thesame been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying up in full unissued Sharesfor allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid. In such event the Directors shall do all actsand things required to give effect to such capitalisation, with full power given to the Directors to make such provisions as they think fit in the case ofShares becoming distributable in fractions (including provisions whereby the benefit of fractional entitlements accrue to the Company rather than tothe Members concerned). The Directors may authorise any person to enter on behalf of all of the Members interested into an agreement with theCompany providing for such capitalisation and matters incidental or relating thereto and any agreement made under such authority shall beeffective and binding on all such Members and the Company. 41Books of Account 41.1The Directors shall cause proper books of account (including, where applicable, material underlying documentation including contracts andinvoices) to be kept with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt orexpenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Such books of account mustbe retained for a minimum period of five years from the date on which they are prepared. Proper books shall not be deemed to be kept if there are notkept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions. 41.2The Directors shall determine whether and to what extent and at what times and places and under what conditions or regulations the accounts andbooks of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shallhave any right of inspecting any account or book or document of the Company except as conferred by Statute or authorised by the Directors or bythe Company in general meeting. 41.3The Directors may cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, groupaccounts (if any) and such other reports and accounts as may be required by law. 32Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 42Audit 42.1The Directors may appoint an Auditor of the Company who shall hold office on such terms as the Directors determine. 42.2Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitledto require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties ofthe Auditor. 42.3Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual generalmeeting following their appointment in the case of a company which is registered with the Registrar of Companies as an ordinary company, and atthe next extraordinary general meeting following their appointment in the case of a company which is registered with the Registrar of Companies asan exempted company, and at any other time during their term of office, upon request of the Directors or any general meeting of the Members. 43Notices 43.1Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by courier, post, cable, telex, fax ore-mail to him or to his address as shown in the Register of Members (or where the notice is given by e-mail by sending it to the e-mail addressprovided by such Member). Any notice, if posted from one country to another, is to be sent by airmail. 43.2Where a notice is sent by courier, service of the notice shall be deemed to be effected by delivery of the notice to a courier company, and shall bedeemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following the day on which the notice wasdelivered to the courier. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, pre paying andposting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or publicholidays in the Cayman Islands) following the day on which the notice was posted. Where a notice is sent by cable, telex or fax, service of the noticeshall be deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day that itwas transmitted. Where a notice is given by e-mail service shall be deemed to be effected by transmitting the e-mail to the e-mail address providedby the intended recipient and shall be deemed to have been received on the same day that it was sent, and it shall not be necessary for the receipt ofthe e-mail to be acknowledged by the recipient. 43.3A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a Share or Shares inconsequence of the death or bankruptcy of a Member in the same manner as other notices which are required to be given under the Articles and shallbe addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the addresssupplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which thesame might have been given if the death or bankruptcy had not occurred. 33Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 43.4Notice of every general meeting shall be given in any manner authorised by the Articles to every holder of Shares carrying an entitlement to receivesuch notice on the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder firstnamed in the Register of Members and every person upon whom the ownership of a Share devolves by reason of his being a legal personalrepresentative or a trustee in bankruptcy of a Member where the Member but for his death or bankruptcy would be entitled to receive notice of themeeting, and no other person shall be entitled to receive notices of general meetings. 44Winding Up 44.1If the Company shall be wound up the liquidator shall apply the assets of the Company in satisfaction of creditors’ claims in such manner and orderas such liquidator thinks fit. (a)Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Company, no distribution shall be made to the holders ofShares ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Participating Preferred Sharesunless, prior thereto, the holders of Series A Participating Preferred Shares shall have received an amount equal to US$1,000 per Series AParticipating Preferred Share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, tothe date of such payment (the “Series A Liquidation Preference”). Following the payment of the full amount of the Series A LiquidationPreference, no additional distributions shall be made to the holders of Series A Participating Preferred Shares unless, prior thereto, theholders of Ordinary Shares shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing(i) the Series A Liquidation Preference by (ii) 1,000 (as appropriately adjusted to reflect events as share splits, share dividends andrecapitalizations with respect to the Ordinary Shares) (such number in clause (ii), the “Adjustment Number”). Following the payment of thefull amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series AParticipating Preferred Shares and Ordinary Shares, respectively, holders of Series A Participating Preferred Shares and holders of OrdinaryShares shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number toone with respect to such Preference Shares and Ordinary Shares, on a per share basis, respectively. (b)In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and theliquidation preferences of all other series of Preference Shares, if any, that rank on a parity with the Series A Participating Preferred Shares,then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidationpreferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, thensuch remaining assets shall be distributed ratably to the holders of Ordinary Shares. 34Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (c)In the event that the Company shall at any time after the Rights Declaration Date (i) declare any dividend on the Ordinary Shares payable inshares of Ordinary Shares, (ii) subdivide the outstanding Ordinary Shares or (iii) combine the outstanding Ordinary Shares into a smallernumber of Shares, then in each such case the Company shall simultaneously effect a proportional adjustment to the Adjustment Number ineffect immediately prior to such event by an amount the numerator of which is the number of shares of Ordinary Shares issued andoutstanding immediately after such event and the denominator of which is the number of shares of Ordinary Shares that were issued andoutstanding immediately prior to such event. 44.2If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares and with the approval of a Special Resolution ofthe Company and any other approval required by the Statute, divide amongst the Members in kind the whole or any part of the assets of theCompany (whether such assets shall consist of property of the same kind or not) and may for that purpose value any assets and determine how thedivision shall be carried out as between the Members or different classes of Members. The liquidator may, with the like approval, vest the whole orany part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so thatno Member shall be compelled to accept any asset upon which there is a liability. 45Indemnity and Insurance 45.1Every Director and officer of the Company (which for the avoidance of doubt, shall not include auditors of the Company), together with everyformer Director and former officer of the Company (each an “Indemnified Person”) shall be indemnified out of the assets of the Company againstany liability, action, proceeding, claim, demand, costs, damages or expenses, including legal expenses, whatsoever which they or any of them mayincur as a result of any act or failure to act in carrying out their functions other than such liability (if any) that they may incur by reason of their ownactual fraud or wilful default. No Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result(whether direct or indirect) of the carrying out of their functions unless that liability arises through the actual fraud or wilful default of suchIndemnified Person. No person shall be found to have committed actual fraud or wilful default under this Article unless or until a court of competentjurisdiction shall have made a finding to that effect. 45.2The Company shall advance to each Indemnified Person reasonable attorneys’ fees and other costs and expenses incurred in connection with thedefence of any action, suit, proceeding or investigation involving such Indemnified Person for which indemnity will or could be sought. Inconnection with any advance of any expenses hereunder, the Indemnified Person shall execute an undertaking to repay the advanced amount to theCompany if it shall be determined by final judgment or other final adjudication that such Indemnified Person was not entitled to indemnificationpursuant to this Article. If it shall be determined by a final judgment or other final adjudication that such Indemnified Person was not entitled toindemnification with respect to such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs orexpenses and any advancement shall be returned to the Company (without interest) by the Indemnified Person. 35Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 45.3The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or other officer of the Companyagainst any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of dutyor breach of trust of which such person may be guilty in relation to the Company. 46Financial Year Unless the Directors otherwise prescribe, the financial year of the Company shall end on 31st December in each year and, following the year ofincorporation, shall begin on 1st January in each year. 47Transfer by Way of Continuation If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution,have the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and to bederegistered in the Cayman Islands. 48Mergers and Consolidations The Company shall have the power to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon suchterms as the Directors may determine and (to the extent required by the Statute) with the approval of a Special Resolution. In the event that theCompany shall enter into any consolidation, merger, combination, conversion, share exchange or other transaction in which the Ordinary Shares areexchanged for or changed into other stock, securities, cash and/or any other property (payable in kind), then in any such case the Series AParticipating Preferred Shares shall at the same time be similarly exchanged or changed in an amount per share (subject to Article 39.4) equal to1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for whicheach Ordinary Share is changed or exchanged. 36 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 4.40 Employment Agreement This Employment Agreement (this “Agreement”), dated as of August 13, 2018, is entered into between China Biologic Products Holdings, Inc., acompany established in the Cayman Islands with its principal office located at 18th Floor, Jialong Int’l Tower, 19 Chaoyang Park Road, Beijing 100125,PRC (“Company”), and Bing Li (the “Executive”). WHEREAS, the Company desires to engage the Executive as, and the Executive agrees to serve as, Chief Executive Officer of the Company, upon theterms and conditions contained herein. NOW THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged by the parties, the parties hereby agree asfollows: 1.EFFECTIVENESS OF AGREEMENT AND EFFECTIVE DATE This Agreement shall become effective as of August 13, 2018. For the purpose of this Agreement, the term “Effective Date” means August 13, 2018. 2.EMPLOYMENT AND DUTIES 2.1 General. The Executive will perform such duties and services for the Company as may be designated from time to time by the Board ofDirectors of the Company (the “Board”). The Executive agrees to serve the Company faithfully and to the best of his ability under the direction of the Boardand to carry out the functions typically performed by a Chief Executive Officer. He further agrees to perform such duties in accordance with the generalfiduciary duties of officers and directors arising under the Cayman Islands Companies Law. The Executive is expected and required to devote substantiallyall of his time and attention during normal business hours to the affairs of the Company and/or its subsidiaries. 2.2 Term of Employment. The Executive’s employment under this Agreement will commence as of the date hereof and will terminate on thesecond year of the Effective Date; provided, however, that the term of the Executive’s employment will be automatically extended without further action ofeither party for additional one (1) year periods unless written notice of either party’s intention not to extend has been given to the other party hereto at leastthirty (30) days prior to the expiration of the then effective term (the initial term and any extensions thereof, the “Term of Employment”). Notwithstandingthe foregoing, the Executive’s employment may be terminated during the Term of Employment as provided in Section 5 below. 2.3 Reimbursement of Expenses. Unless otherwise agreed to by the Executive and the Company, the Company will reimburse the Executivefor reasonable travel and other business expenses incurred by him to fulfill his duties hereunder upon presentation by the Executive of an itemized account ofsuch expenditures, in accordance with Company practices consistently applied. 3.COMPENSATION 3.1 Base Salary. From the Effective Date, the Executive will be entitled to receive a base salary (“Base Salary”) at a rate of US$550,000 perannum, payable in accordance with the Company’s payroll practices and applicable law. If the rate of Base Salary per annum paid to Executive is increasedduring the Term of Employment, such increased rate will thereafter constitute the Base Salary for all purposes of this Agreement. Base Salary will not bedecreased during the Term of Employment without the mutual consent of Executive and the Company. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 3.2 Annual Review. The Executive’s Base Salary will be reviewed by the Board, based upon the Executive’s performance not less thanannually. 3.3 Bonus Compensation. In addition to his Base Salary, the Executive would be eligible to receive additional bonus compensation as may beawarded to the Executive from time to time by the Board in the sole and absolute discretion of the Board. 3.4 Additional Compensation. The Company may, in its sole discretion, award the Executive equity-based compensation. The Executivefurther will be eligible to participate in any employment compensation plan established by the Company under the same terms as other Company executivesand approved by the Board. 4.EMPLOYEE BENEFITS 4.1 Leave. The Executive will be entitled to accrue 25 working days paid annual leave each calendar year. All annual leave days will be takenat times mutually agreed by the Executive and the Company and will be subject to the business needs of the Company. If, however, in any calendar yearduring the Term of Employment, the Executive is unable to take any annual leave due to the business needs of the Company, the Company, in its discretion,shall either pay the Executive the equivalent of 25 working days, or permit the Executive to carry such leave over into the following calendar year. 4.2 Other Programs. The Executive will, during his employment under this Agreement, be included to the extent eligible thereunder in allemployee benefit plans, programs or arrangements (including, without limitation, any plans, programs or arrangements providing for retirement benefits,incentive compensation, profit sharing, bonuses, disability benefits, health and life insurance, or vacation and paid holiday) which may be established by theCompany for, or made available to, its executives generally. 4.3 Family Visits. Company should cover the travel expenses for Executive’s family visits, including (1) four times per annual for Executive tovisit his family; (2) one time per annual for family members to visit Executive. The travel standard includes business-class airfare, other transportation andreasonable accommodation expenses. 5.TERMINATION OF EMPLOYMENT 5.1 Termination Events. 5.1.1 By the Company. The Company may terminate the Executive’s employment immediately with Cause, without Cause uponninety (90) days notice to the Executive, or upon the Executive’s death or Permanent Disability (as hereinafter defined). 5.1.2 By the Executive. The Executive may terminate his employment at any time for any reason upon ninety (90) days written noticeto the Company. 5.2 Termination by Company With Cause. If the Executive’s employment is terminated by the Company with Cause, the Company shall payto the Executive all compensation to which the Executive is entitled through the date of termination, and thereafter, all of the Company’s obligations underthis Agreement shall cease. 5.3 Termination by Company Without Cause. Except in situations where the Executive’s employment is terminated under Section 5.2 orSection 5.4, by death or by Permanent Disability, in the event that the Company terminates Executive’s employment at any time without Cause, theExecutive shall be entitled to receive an amount equal to twelve (12) months of the Executive’s then current Base Salary paid in twelve (12) equal monthlyinstallments, subject to Sections 5.7 and 5.8. -2- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 5.4 Change of Control. In the event of a Change of Control, the Company shall (i) assign this Agreement and all rights and obligations underit to any business entity that succeeds to all or substantially all of the Company’s business through that merger or combination or sale of assets, or (ii) on atleast thirty (30) days’ prior written notice to the Executive, terminate this Agreement upon the effective date of such Change of Control. In the event that theCompany terminates Executive’s employment pursuant to this Section 5.4, the Executive shall be entitled to receive, upon termination an amount equal toeighteen (18) months of the Executive’s then current Base Salary paid in eighteen (18) equal monthly installments, subject to Sections 5.7 and 5.8. For the purpose of this Agreement, “Change of Control” means the occurrence of any of the following events: (a) The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets; (b) The consummation of a merger or consolidation of the Company with any other entity, unless the voting securities of the Company immediatelyprior to the merger or consolidation remain outstanding or are converted into voting securities of the surviving entity or parent so that they continue torepresent at least fifty percent (50%) of the total voting power represented by the voting securities of the surviving entity (or parent) outstanding immediatelyafter such merger or consolidation; or (c) A change in the composition of the Board, which results in fewer than a majority of the directors being “Incumbent Directors.” For purpose of thisprovision, “Incumbent Directors” shall mean directors who either (i) are directors as of the Effective Date, or (ii) are elected, or nominated for election, to theBoard with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transactions describedabove or in connection with an actual or threatened proxy contest relating to election. 5.5 Voluntary Resignation. If the Executive terminates his employment voluntarily, then the Executive shall not be entitled to receivepayment of any severance benefits. The Company further shall have the option, in its sole discretion, to make the Executive’s termination effective at anytime prior to the end of notice period required under Section 5.1.2 as long as the Company provides Executive with all compensation to which he would beentitled for continuing employment through the last day of the notice period. Thereafter, all obligations of the Company under this Agreement shall cease. 5.6 Cause. Termination for “Cause” means termination of the Executive’s employment by the Company because of: (i) any act or omission that constitutes a breach by the Executive of any of his obligations under this Agreement or any Companypolicy or procedure and failure to cure such breach after notice of, and a reasonable opportunity to cure, such breach; (ii) the continued willful failure or refusal of the Executive to substantially perform the duties reasonably required of him as anemployee of the Company; (iii) an alleged act (with credible substantiated evidence) of moral turpitude, dishonesty, fraud or violation of law (whether or notconnected to the Company or its Affiliates (as defined in Section 8.1)) by, or criminal conviction of, the Executive which in the determination of the Board(in its sole discretion) would render his continued employment by the Company damaging or detrimental to the Company or its Affiliates in any way; or (iv) any misappropriation of Company property by the Executive. -3- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 5.7 Release of Claims. The receipt of any severance payments pursuant to Sections 5.3 or 5.4 of this Agreement is subject to the Executivesigning and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company (the “Release”), which must becomeeffective and irrevocable no later than the 60th day following the date of Executive’s termination of employment (the “Release Deadline”), and if not, theExecutive will forfeit any right to severance payments or benefits under this Agreement. In addition, no severance payments or benefits will be paid orprovided until the Release actually becomes effective. To the extent that any severance payments or benefits constitute Deferred Payments (as definedbelow), severance payments shall commence on the 61st day following Executive’s termination of employment, subject to Section 5.8. 5.8 Section 409A. The Company intends that all severance payments made under this Agreement comply with, or be exempt from, therequirements of Section 409A of the Internal Revenue Code of 1986, as amended, and any guidance promulgated thereunder (“Section 409A”) so that noneof the payments or benefits will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will beinterpreted to so comply or be exempt. Specifically, the severance benefits are intended to be exempt from the requirements of Section 409A under theseparation pay plan exception set forth under Section 409A. If, at the time of the Executive’s separation from service, the Executive is a “specified employee”within the meaning of Section 409A and the severance benefits payable under this Agreement, when considered together with any other severance paymentsor separation benefits, are considered deferred compensation under Section 409A (together, the “Deferred Payments”), payment of such Deferred Paymentswill be delayed to the extent necessary to avoid the imposition of the additional tax imposed under Section 409A, which generally means that Executive willbegin to receive payments on the date 6 months and 1 day following the Executive’s separation from service. The Company and the Executive agree to worktogether in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoidimposition of any additional tax or income recognition prior to actual payment to you under Section 409A. In no event will the Company reimburse theExecutive for any taxes that may be imposed on Executive as a result of Section 409A. 6.DEATH OR DISABILITY In the event of termination of employment by reason of non-work-related death or Permanent Disability, the Executive (or his estate, as applicable)will be entitled to the Base Salary and benefits determined under Sections 3 and 4 through the date of termination. In the event of termination of employmentby reason of work related death or Permanent Disability, the Executive (or his estate, as applicable) will be entitled to the greater of (i) Base Salary andbenefits determined under Sections 3 and 4 through the date of termination, or (ii) the minimum compensation permitted by applicable law. Other benefitswill be determined in accordance with the benefit plans maintained by the Company, and the Company will have no further obligation hereunder. Forpurposes of this Agreement, “Permanent Disability” means a physical or mental disability or infirmity of the Executive that prevents the normal performanceof substantially all his duties as an employee of the Company, which disability or infirmity exists for any continuous period of 180 days. 7.CONFIDENTIALITY 7.1 Confidentiality. The Executive covenants and agrees with the Company that he will not at any time during the Term of Employment andthereafter, except in performance of his obligations to the Company hereunder or with the prior written consent of the Company, directly or indirectly,disclose any secret or confidential information that he may learn or has learned by reason of his association with the Company or any of its subsidiaries andAffiliates. The term “confidential information” includes information not previously made generally available to the public or to the trade by the Company’smanagement, with respect to the Company’s or any of its subsidiaries’ or Affiliates’ products, facilities, applications and methods, trade secrets and otherintellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information(including the revenues, costs or profits associated with any of the Company’s products), business plans, prospects or opportunities, but will exclude anyinformation which is or becomes generally available to the public or is generally known in the industry or industries in which the Company operates otherthan as a result of disclosure by the Executive in violation of his agreements under Section 7.1. The Executive will be released of his obligations under thisSection 7.1 to the extent the Executive is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal orauthority having jurisdiction in the matter or under subpoena or other process of law provided that the Executive provides the Company with prompt writtennotice of such requirement. For the purposes of this Agreement, “Affiliate” means, with respect to any person or entity, any other person or entity that isdirectly or indirectly through one or more intermediaries, controlled by, controlling or under common control with such person or entity. -4- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 7.2 Acknowledgment of Company Assets. The Executive acknowledges that the Company, at the Company’s expense, has acquired, createdand maintains, and will continue to acquire, create and maintain, significant goodwill with its current and prospective customers, vendors and employees,and that such goodwill is valuable property of the Company. The Executive further acknowledges that to the extent such goodwill will be generated throughthe Executive’s efforts, such efforts will be funded by the Company and the Executive will be fairly compensated for such efforts. The Executiveacknowledges that all goodwill developed by the Executive relative to the Company’s customers, vendors and employees will be the sole and exclusiveproperty of the Company and will not be personal to the Executive. 7.3 Exclusive Property. The Executive confirms that all confidential information is and will remain the exclusive property of the Company.All business records, papers and documents kept or made by Executive relating to the business of the Company will be and remain the property of theCompany, except for such papers customarily deemed to be the personal copies of the Executive. Upon termination of the Executive’s employment with theCompany for any reason, the Executive will promptly deliver to the Company all of the following that are in the Executive’s possession or under his control:(i) all computers, telecommunication devices and other tangible property of the Company and its Affiliates, and (ii) all documents and other materials, inwhatever form, which include confidential information or which otherwise relate in whole or in part to the present or prospective business of the Company orits Affiliates, including but not limited to, drawings, graphs, charts, specifications, notes, reports, memoranda, and computer disks and tapes, and all copiesthereof. 7.4 Communication to Third Parties. The Executive agrees that Company will have the right to communicate the terms of this Section 7 to anythird parties, including but not limited to, any prospective employer of the Executive. The Company waives any right to assert any claim for damages againstCompany or any officer, employee or agent of Company arising from such disclosure of the terms of this Section 7. 7.5 Independent Obligations. The provisions of this Section 7 will be independent of any other provision of this Agreement. The existence ofany claim or cause of action by the Executive against the Company, whether predicated on this Agreement or otherwise, will not constitute a defense of theenforcement of this Section 7 by the Company. 7.6 Non-Exclusivity. The Company’s rights and the Executive’s obligations set forth in this Section 7 are in addition to, and not in lieu of, allrights and obligations provided by applicable statutory or common law. 8.INDEMNIFICATION 8.1 Indemnification of the Executive. The Company agrees to indemnify Executive (and his heirs, executors, and administrators), and toadvance expenses related to this indemnification, to the fullest extent permitted under applicable law and regulations, against any and all expenses andliabilities that Executive reasonably incurs in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of hisservice as an Executive of the Company or any of its subsidiaries or Affiliates (whether or not he continues to be an Executive at the time of incurring anysuch expenses or liabilities). Covered expenses and liabilities include, but are not limited to, judgments, court costs, and attorneys’ fees and the costs ofreasonable settlements, subject to Board approval, if the action is brought against Executive in his capacity as an Executive of the Company or any of itssubsidiaries or Affiliates. Indemnification for expenses will not extend to matters related to Executive’s termination for Cause. Notwithstanding anything inthis Section 8.1 to the contrary, the Company will not be required to provide indemnification prohibited by applicable law or regulation. The obligations ofthis Section 8.1 will survive the term of this Agreement by a period of six (6) years. -5- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 8.2 Indemnification of the Company. The Executive will indemnify and keep the Company fully indemnified at all times from and against all claims, suits, proceedings, fines, punishment,loss, damage, costs and liabilities whatsoever incurred or sustained by the Company in connection with or arising out of or as a consequence of any breach bythe Executive of the confidentiality obligations set forth above. 9.FOREIGN CORRUPT PRACTICES ACT The Company and the Executive each represent and warrant that it is aware of and familiar with the provisions of the Foreign Corrupt Practices Act of1977, as amended by the Omnibus Trade and Competitiveness Act of 1988 (“FCPA”), and the rules and regulations thereunder, and its purpose. Each partyagrees that it will take no action and make no payment in violation of, or which might cause the Company or the Executive to be in violation of, the FCPA,including, but not limited to, the making of unlawful payments to foreign or domestic government officials or employees or to any foreign or domesticpolitical parties or campaigns from corporate funds. 10.MISCELLANEOUS 10.1 Severability. The parties intend this Agreement to be enforced as written. However, (i) if any portion or provision of this Agreement is toany extent be declared illegal or unenforceable by a duly authorized court having jurisdiction, then the remainder of this Agreement, or the application ofsuch portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, will not be affected thereby, and eachportion and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law and (ii) if any provision, or part thereof, is held tobe unenforceable because of the duration of such provision, the geographic area covered thereby, or other aspect of the scope of such provision, the courtmaking such determination will have the power to reduce the duration, geographic area of such provision, or other aspect of the scope of such provision,and/or to delete specific words and phrases (“blue-penciling”), and in its reduced or blue-penciled form, such provision will then be enforceable and will beenforced. 10.2 Assignment. The rights and obligations of this Agreement will bind and inure to the benefit of any successor of the Company byreorganization, merger or consolidation, or any assignee of all or substantially all of the Company’s business and properties. Neither this Agreement nor anyrights hereunder will be assignable or otherwise subject to hypothecation by the Executive. 10.3 Entire Agreement. This Agreement represents the entire agreement of the Company and the Executive and will supersede any and allprevious contracts, arrangements or understandings. 10.4 Governing Law. This Agreement will be construed and interpreted in accordance with and governed by the law of the State of Delaware,USA, without regard to the choice-of-law provisions thereof that might direct the application of the law of another jurisdiction. 10.5 Dispute Resolution. Any legal action or proceeding with respect to this Agreement shall be brought in the courts of Delaware, or theUnited States District Court for the District of Delaware. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and inrespect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts. [SIGNATURE PAGE FOLLOWS] -6- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. IN WITNESS WHEREOF, the Executive and the authorized representative of China Biologic Products Holdings, Inc., execute and enter into thisAgreement as of the date first written above. EXECUTIVE /s/ Bing Li Bing Li Passport No. ______________ CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. By:/s/ David Hui Li Name:David Hui Li Title:Chairman Date:August 13, 2018 -7- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 4.41 Third Amended and Restated Employment Agreement This Third Amended and Restated Employment Agreement (this “Agreement”), dated as of August 31, 2018, is entered into between China BiologicProducts Holdings, Inc. (formerly known as China Biologic Products, Inc.), a company established in the Cayman Islands with its principal office located at18th Floor, Jialong Int’l Tower, 19 Chaoyang Park Road, Beijing 100125, PRC (the “Company”), and Ming Yang (the “Executive”). WHEREAS, the Company and the Executive entered into an employment agreement dated as of August 31, 2012 (the “2012 Agreement”), pursuantto which the Company engaged the Executive as, and the Executive agreed to serve as, Chief Financial Officer of the Company, upon the terms andconditions contained therein; WHEREAS, the Company and the Executive entered into a renewal employment agreement dated as of August 31, 2014 (the “2014 Agreement”) andAugust 31, 2016 (the “2016 Agreement”) with terms and conditions substantially similar with those under the 2012 Agreement; WHEREAS, the term of the 2016 Agreement expires on August 31, 2018; and WHEREAS, the Company and the Executive desire to extend the term of the 2016 Agreement upon the terms and conditions contained herein. NOW THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged by the parties, the parties hereby agree asfollows: 1.EFFECTIVENESS OF AGREEMENT AND EFFECTIVE DATE This Agreement shall become effective as of August 31, 2018. For the purpose of this Agreement, the term “Effective Date” means August 31, 2018. 2.EMPLOYMENT AND DUTIES 2.1 General. The Executive will perform such duties and services for the Company as may be designated from time to time by the Board ofDirectors (the “Board”) and the Chief Executive Officer of the Company. The Executive agrees to serve the Company faithfully and to the best of his abilityunder the direction of the Board and to carry out the functions typically performed by a Chief Financial Officer. The Executive further agrees to perform suchduties in accordance with the general fiduciary duties of officers and directors arising under the Delaware General Corporation Law. The Executive isexpected and required to devote substantially all of his time and attention during normal business hours to the affairs of the Company and/or its subsidiaries. 2.2 Term of Employment. The Executive’s employment under this Agreement will commence as of the date hereof and will terminate on thefirst year of the Effective Date; provided, however, that the term of the Executive’s employment will be automatically extended without further action ofeither party for additional one (1) year periods unless written notice of either party’s intention not to extend has been given to the other party hereto at leastthirty (30) days prior to the expiration of the then effective term (the initial term and any extensions thereof, the “Term of Employment”). Notwithstandingthe foregoing, the Executive’s employment may be terminated during the Term of Employment as provided in Section 5 below. 2.3 Reimbursement of Expenses. Unless otherwise agreed to by the Executive and the Company, the Company will reimburse the Executivefor reasonable travel and other business expenses incurred by him to fulfill his duties hereunder upon presentation by the Executive of an itemized account ofsuch expenditures, in accordance with Company practices consistently applied. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 3.COMPENSATION 3.1 Base Salary. From the Effective Date, the Executive will be entitled to receive a base salary (“Base Salary”) at a rate of US$265,000 perannum, payable in accordance with the Company’s payroll practices and applicable law. If the rate of Base Salary per annum paid to Executive is increasedduring the Term of Employment, such increased rate will thereafter constitute the Base Salary for all purposes of this Agreement. Base Salary will not bedecreased during the Term of Employment without the mutual consent of Executive and the Company. 3.2 Annual Review. The Executive’s Base Salary will be reviewed by the Board, based upon the Executive’s performance not less thanannually. 3.3 Bonus Compensation. In addition to his Base Salary, the Executive would be eligible to receive additional bonus compensation as may beawarded to the Executive from time to time by the Board in the sole and absolute discretion of the Board. 3.4 Additional Compensation. The Company may, in its sole discretion, award the Executive additional equity-based compensation. TheExecutive further will be eligible to participate in any employment compensation plan established by the Company under the same terms as other Companyexecutives and approved by the Board. 4.EMPLOYEE BENEFITS 4.1 Leave. The Executive will be entitled to accrue 15 working days paid annual leave each calendar year (which will not be carried over inthe event that they are not used by the Executive). All annual leave days will be taken at times mutually agreed by the Executive and the Company and willbe subject to the business needs of the Company. If, however, in any calendar year during the Term of Employment, the Executive is unable to take anyannual leave due to the business needs of the Company, the Company, in its discretion, shall either pay the Executive the equivalent of 15 working days, orpermit the Executive to carry such leave over into the following calendar year. 4.2 Other Programs. The Executive will, during his employment under this Agreement, be included to the extent eligible thereunder in allemployee benefit plans, programs or arrangements (including, without limitation, any plans, programs or arrangements providing for retirement benefits,incentive compensation, profit sharing, bonuses, disability benefits, health and life insurance, or vacation and paid holiday) which may be established by theCompany for, or made available to, its executives generally. 5.TERMINATION OF EMPLOYMENT 5.1 Termination Events. 5.1.1 By the Company. The Company may terminate the Executive’s employment immediately with Cause, without Cause uponninety (90) days notice to the Executive, or upon the Executive’s death or Permanent Disability (as hereinafter defined). 5.1.2 By the Executive. The Executive may terminate his employment at any time for any reason upon ninety (90) days written noticeto the Company. 5.2 Termination by Company With Cause. If the Executive’s employment is terminated by the Company with Cause, the Company shall payto the Executive all compensation to which the Executive is entitled through the date of termination, and thereafter, all of the Company’s obligations underthis Agreement shall cease. 5.3 Termination by Company Without Cause. Except in situations where the Executive’s employment is terminated under Section 5.2 orSection 5.4, by death or by Permanent Disability, in the event that the Company terminates Executive’s employment at any time without Cause, theExecutive shall be entitled to receive an amount equal to twelve (12) months of the Executive’s then current Base Salary paid in twelve (12) equal monthlyinstallments, subject to Sections 5.7 and 5.8. -2- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 5.4 Change of Control. In the event of a Change of Control, the Company shall (i) assign this Agreement and all rights and obligations underit to any business entity that succeeds to all or substantially all of the Company’s business through that merger or combination or sale of assets, or (ii) on atleast thirty (30) days’ prior written notice to the Executive, terminate this Agreement upon the effective date of such Change of Control. In the event that theCompany terminates Executive’s employment pursuant to this Section 5.4, the Executive shall be entitled to receive, upon termination an amount equal toeighteen (18) months of the Executive’s then current Base Salary paid in eighteen (18) equal monthly installments, subject to Sections 5.7 and 5.8. For the purpose of this Agreement, “Change of Control” means the occurrence of any of the following events: (a) The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets; (b) The consummation of a merger or consolidation of the Company with any other entity, unless the voting securities of the Company immediatelyprior to the merger or consolidation remain outstanding or are converted into voting securities of the surviving entity or parent so that they continue torepresent at least fifty percent (50%) of the total voting power represented by the voting securities of the surviving entity (or parent) outstanding immediatelyafter such merger or consolidation; or (c) A change in the composition of the Board, which results in fewer than a majority of the directors being “Incumbent Directors.” For purpose of thisprovision, “Incumbent Directors” shall mean directors who either (i) are directors as of the Effective Date, or (ii) are elected, or nominated for election, to theBoard with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transactions describedabove or in connection with an actual or threatened proxy contest relating to election. 5.5 Voluntary Resignation. If the Executive terminates his employment voluntarily, then the Executive shall not be entitled to receivepayment of any severance benefits. The Company further shall have the option, in its sole discretion, to make the Executive’s termination effective at anytime prior to the end of notice period required under Section 5.1.2 as long as the Company provides Executive with all compensation to which he would beentitled for continuing employment through the last day of the notice period. Thereafter, all obligations of the Company under this Agreement shall cease. 5.6 Cause. Termination for “Cause” means termination of the Executive’s employment by the Company because of: (i) any act or omission that constitutes a breach by the Executive of any of his obligations under this Agreement or any Companypolicy or procedure and failure to cure such breach after notice of, and a reasonable opportunity to cure, such breach; (ii) the continued willful failure or refusal of the Executive to substantially perform the duties reasonably required of him as anemployee of the Company; (iii) an alleged act (with credible substantiated evidence) of moral turpitude, dishonesty, fraud or violation of law (whether or notconnected to the Company or its Affiliates (as defined in Section 8.1)) by, or criminal conviction of, the Executive which in the determination of the Board(in its sole discretion) would render his continued employment by the Company damaging or detrimental to the Company or its Affiliates in any way; or (iv) any misappropriation of Company property by the Executive. -3- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 5.7 Release of Claims. The receipt of any severance payments pursuant to Sections 5.3 or 5.4 of this Agreement is subject to the Executivesigning and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company (the “Release”), which must becomeeffective and irrevocable no later than the 60th day following the date of Executive’s termination of employment (the “Release Deadline”), and if not, theExecutive will forfeit any right to severance payments or benefits under this Agreement. In addition, no severance payments or benefits will be paid orprovided until the Release actually becomes effective. To the extent that any severance payments or benefits constitute Deferred Payments (as definedbelow), severance payments shall commence on the 61st day following Executive’s termination of employment, subject to Section 5.8. 5.8 Section 409A. The Company intends that all severance payments made under this Agreement comply with, or be exempt from, therequirements of Section 409A of the Internal Revenue Code of 1986, as amended, and any guidance promulgated thereunder (“Section 409A”) so that noneof the payments or benefits will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will beinterpreted to so comply or be exempt. Specifically, the severance benefits are intended to be exempt from the requirements of Section 409A under theseparation pay plan exception set forth under Section 409A. If, at the time of the Executive’s separation from service, the Executive is a “specified employee”within the meaning of Section 409A and the severance benefits payable under this Agreement, when considered together with any other severance paymentsor separation benefits, are considered deferred compensation under Section 409A (together, the “Deferred Payments”), payment of such Deferred Paymentswill be delayed to the extent necessary to avoid the imposition of the additional tax imposed under Section 409A, which generally means that Executive willbegin to receive payments on the date 6 months and 1 day following the Executive’s separation from service. The Company and the Executive agree to worktogether in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoidimposition of any additional tax or income recognition prior to actual payment to you under Section 409A. In no event will the Company reimburse theExecutive for any taxes that may be imposed on Executive as a result of Section 409A. 6.DEATH OR DISABILITY In the event of termination of employment by reason of non-work-related death or Permanent Disability, the Executive (or his estate, as applicable)will be entitled to the Base Salary and benefits determined under Sections 3 and 4 through the date of termination. In the event of termination of employmentby reason of work related death or Permanent Disability, the Executive (or his estate, as applicable) will be entitled to the greater of (i) Base Salary andbenefits determined under Sections 3 and 4 through the date of termination, or (ii) the minimum compensation permitted by applicable law. Other benefitswill be determined in accordance with the benefit plans maintained by the Company, and the Company will have no further obligation hereunder. Forpurposes of this Agreement, “Permanent Disability” means a physical or mental disability or infirmity of the Executive that prevents the normal performanceof substantially all his duties as an employee of the Company, which disability or infirmity exists for any continuous period of 180 days. 7.CONFIDENTIALITY 7.1 Confidentiality. The Executive covenants and agrees with the Company that he will not at any time during the Term of Employment andthereafter, except in performance of his obligations to the Company hereunder or with the prior written consent of the Company, directly or indirectly,disclose any secret or confidential information that he may learn or has learned by reason of his association with the Company or any of its subsidiaries andAffiliates. The term “confidential information” includes information not previously made generally available to the public or to the trade by the Company’smanagement, with respect to the Company’s or any of its subsidiaries’ or Affiliates’ products, facilities, applications and methods, trade secrets and otherintellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information(including the revenues, costs or profits associated with any of the Company’s products), business plans, prospects or opportunities, but will exclude anyinformation which is or becomes generally available to the public or is generally known in the industry or industries in which the Company operates otherthan as a result of disclosure by the Executive in violation of his agreements under Section 7.1. The Executive will be released of his obligations under thisSection 7.1 to the extent the Executive is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal orauthority having jurisdiction in the matter or under subpoena or other process of law provided that the Executive provides the Company with prompt writtennotice of such requirement. For the purposes of this Agreement, “Affiliate” means, with respect to any person or entity, any other person or entity that isdirectly or indirectly through one or more intermediaries, controlled by, controlling or under common control with such person or entity. -4- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 7.2 Acknowledgment of Company Assets. The Executive acknowledges that the Company, at the Company’s expense, has acquired, createdand maintains, and will continue to acquire, create and maintain, significant goodwill with its current and prospective customers, vendors and employees,and that such goodwill is valuable property of the Company. The Executive further acknowledges that to the extent such goodwill will be generated throughthe Executive’s efforts, such efforts will be funded by the Company and the Executive will be fairly compensated for such efforts. The Executiveacknowledges that all goodwill developed by the Executive relative to the Company’s customers, vendors and employees will be the sole and exclusiveproperty of the Company and will not be personal to the Executive. 7.3 Exclusive Property. The Executive confirms that all confidential information is and will remain the exclusive property of the Company.All business records, papers and documents kept or made by Executive relating to the business of the Company will be and remain the property of theCompany, except for such papers customarily deemed to be the personal copies of the Executive. Upon termination of the Executive’s employment with theCompany for any reason, the Executive will promptly deliver to the Company all of the following that are in the Executive’s possession or under his control:(i) all computers, telecommunication devices and other tangible property of the Company and its Affiliates, and (ii) all documents and other materials, inwhatever form, which include confidential information or which otherwise relate in whole or in part to the present or prospective business of the Company orits Affiliates, including but not limited to, drawings, graphs, charts, specifications, notes, reports, memoranda, and computer disks and tapes, and all copiesthereof. 7.4 Communication to Third Parties. The Executive agrees that Company will have the right to communicate the terms of this Section 7 to anythird parties, including but not limited to, any prospective employer of the Executive. The Company waives any right to assert any claim for damages againstCompany or any officer, employee or agent of Company arising from such disclosure of the terms of this Section 7. 7.5 Independent Obligations. The provisions of this Section 7 will be independent of any other provision of this Agreement. The existence ofany claim or cause of action by the Executive against the Company, whether predicated on this Agreement or otherwise, will not constitute a defense of theenforcement of this Section 7 by the Company. 7.6 Non-Exclusivity. The Company’s rights and the Executive’s obligations set forth in this Section 7 are in addition to, and not in lieu of, allrights and obligations provided by applicable statutory or common law. 8.INDEMNIFICATION 8.1 Indemnification of the Executive. The Company agrees to indemnify Executive (and his heirs, executors, and administrators), and toadvance expenses related to this indemnification, to the fullest extent permitted under applicable law and regulations, against any and all expenses andliabilities that Executive reasonably incurs in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of hisservice as an Executive of the Company or any of its subsidiaries or Affiliates (whether or not he continues to be an Executive at the time of incurring anysuch expenses or liabilities). Covered expenses and liabilities include, but are not limited to, judgments, court costs, and attorneys’ fees and the costs ofreasonable settlements, subject to Board approval, if the action is brought against Executive in his capacity as an Executive of the Company or any of itssubsidiaries or Affiliates. Indemnification for expenses will not extend to matters related to Executive’s termination for Cause. Notwithstanding anything inthis Section 8.1 to the contrary, the Company will not be required to provide indemnification prohibited by applicable law or regulation. The obligations ofthis Section 8.1 will survive the term of this Agreement by a period of six (6) years. -5- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 8.2 Indemnification of the Company. The Executive will indemnify and keep the Company fully indemnified at all times from and against all claims, suits, proceedings, fines, punishment,loss, damage, costs and liabilities whatsoever incurred or sustained by the Company in connection with or arising out of or as a consequence of any breach bythe Executive of the confidentiality obligations set forth above. 9.FOREIGN CORRUPT PRACTICES ACT The Company and the Executive each represent and warrant that it is aware of and familiar with the provisions of the Foreign Corrupt Practices Act of1977, as amended by the Omnibus Trade and Competitiveness Act of 1988 (“FCPA”), and the rules and regulations thereunder, and its purpose. Each partyagrees that it will take no action and make no payment in violation of, or which might cause the Company or the Executive to be in violation of, the FCPA,including, but not limited to, the making of unlawful payments to foreign or domestic government officials or employees or to any foreign or domesticpolitical parties or campaigns from corporate funds. 10.MISCELLANEOUS 10.1 Severability. The parties intend this Agreement to be enforced as written. However, (i) if any portion or provision of this Agreement is toany extent be declared illegal or unenforceable by a duly authorized court having jurisdiction, then the remainder of this Agreement, or the application ofsuch portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, will not be affected thereby, and eachportion and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law and (ii) if any provision, or part thereof, is held tobe unenforceable because of the duration of such provision, the geographic area covered thereby, or other aspect of the scope of such provision, the courtmaking such determination will have the power to reduce the duration, geographic area of such provision, or other aspect of the scope of such provision,and/or to delete specific words and phrases (“blue-penciling”), and in its reduced or blue-penciled form, such provision will then be enforceable and will beenforced. 10.2 Assignment. The rights and obligations of this Agreement will bind and inure to the benefit of any successor of the Company byreorganization, merger or consolidation, or any assignee of all or substantially all of the Company’s business and properties. Neither this Agreement nor anyrights hereunder will be assignable or otherwise subject to hypothecation by the Executive. 10.3 Entire Agreement. This Agreement represents the entire agreement of the Company and the Executive and will supersede any and allprevious contracts, arrangements or understandings. 10.4 Governing Law. This Agreement will be construed and interpreted in accordance with and governed by the law of the State of Delaware,USA, without regard to the choice-of-law provisions thereof that might direct the application of the law of another jurisdiction. 10.5 Dispute Resolution. Any legal action or proceeding with respect to this Agreement shall be brought in the courts of Delaware, or theUnited States District Court for the District of Delaware. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and inrespect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts. [SIGNATURE PAGE FOLLOWS] -6- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. IN WITNESS WHEREOF, the Executive and the authorized representative of China Biologic Products Holdings, Inc., execute and enter into thisAgreement as of the date first written above. EXECUTIVE /s/ Ming Yang Mr. Ming Yang CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. By:/s/ David Hui Li Name:David Hui Li Title:Chairman Date:August 31, 2018 -7- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 4.42 Employment Agreement This Employment Agreement (this “Agreement”), dated as of December 3, 2018, is entered into between China Biologic Products Holdings, Inc., acompany established in the Cayman Islands with its principal office located at 18th Floor, Jialong Int’l Tower, 19 Chaoyang Park Road, Beijing 100125,PRC (“Company”), and Huaming He (the “Executive”). WHEREAS, the Company desires to engage the Executive as, and the Executive agrees to serve as, Executive Vice President and Chief BusinessOfficer of the Company, upon the terms and conditions contained herein. NOW THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged by the parties, the parties hereby agree asfollows: 1.EFFECTIVENESS OF AGREEMENT AND EFFECTIVE DATE This Agreement shall become effective as of December 3, 2018. For the purpose of this Agreement, the term “Effective Date” means December 3,2018. 2.EMPLOYMENT AND DUTIES 2.1 General. The Executive will perform such duties and services for the Company as may be designated from time to time by the ChiefExecutive Officer (the “CEO”) of the Company. The Executive agrees to serve the Company faithfully and to the best of his ability under the direction of theCEO and to carry out the functions typically performed by a Chief Business Officer. He further agrees to perform such duties in accordance with the generalfiduciary duties of officers and directors arising under the Cayman Islands Companies Law. The Executive is expected and required to devote substantiallyall of his time and attention during normal business hours to the affairs of the Company and/or its subsidiaries. 2.2 Term of Employment. The Executive’s employment under this Agreement will commence as of the date hereof and will terminate on thesecond year of the Effective Date; provided, however, that the term of the Executive’s employment will be automatically extended without further action ofeither party for additional one (1) year periods unless written notice of either party’s intention not to extend has been given to the other party hereto at leastthirty (30) days prior to the expiration of the then effective term (the initial term and any extensions thereof, the “Term of Employment”). Notwithstandingthe foregoing, the Executive’s employment may be terminated during the Term of Employment as provided in Section 5 below. 2.3 Reimbursement of Expenses. Unless otherwise agreed to by the Executive and the Company, the Company will reimburse the Executivefor reasonable travel and other business expenses incurred by him to fulfill his duties hereunder upon presentation by the Executive of an itemized account ofsuch expenditures, in accordance with Company practices consistently applied. 3.COMPENSATION 3.1 Base Salary. From the Effective Date, the Executive will be entitled to receive a base salary (“Base Salary”) at a rate of US$450,000 perannum, payable in accordance with the Company’s payroll practices and applicable law. If the rate of Base Salary per annum paid to Executive is increasedduring the Term of Employment, such increased rate will thereafter constitute the Base Salary for all purposes of this Agreement. Base Salary will not bedecreased during the Term of Employment without the mutual consent of Executive and the Company. Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 3.2 Annual Review. The Executive’s Base Salary will be reviewed by the CEO, based upon the Executive’s performance not less thanannually. 3.3 Bonus Compensation. In addition to his Base Salary, the Executive would be eligible to receive additional bonus compensation as may beawarded to the Executive from time to time by the CEO in the sole and absolute discretion of the CEO. 3.4 Additional Compensation. The Company may, in its sole discretion, award the Executive equity-based compensation, and other cashallowances including housing allowance. The Executive further will be eligible to participate in any employment compensation plan established by theCompany under the same terms as other Company executives and approved by the Board. 4.EMPLOYEE BENEFITS 4.1 Leave. The Executive will be entitled to accrue 15 working days paid annual leave each calendar year. All annual leave days will be takenat times mutually agreed by the Executive and the Company and will be subject to the business needs of the Company. If, however, in any calendar yearduring the Term of Employment, the Executive is unable to take any annual leave due to the business needs of the Company, the Company, in its discretion,shall either pay the Executive the equivalent of 15 working days, or permit the Executive to carry such leave over into the following calendar year. 4.2 Other Programs. The Executive will, during his employment under this Agreement, be included to the extent eligible thereunder in allemployee benefit plans, programs or arrangements (including, without limitation, any plans, programs or arrangements providing for retirement benefits,incentive compensation, profit sharing, bonuses, disability benefits, health and life insurance, or vacation and paid holiday) which may be established by theCompany for, or made available to, its executives generally. 5.TERMINATION OF EMPLOYMENT 5.1 Termination Events. 5.1.1 By the Company. The Company may terminate the Executive’s employment immediately with Cause, without Cause uponninety (90) days notice to the Executive, or upon the Executive’s death or Permanent Disability (as hereinafter defined). 5.1.2 By the Executive. The Executive may terminate his employment at any time for any reason upon ninety (90) days written noticeto the Company. 5.2 Termination by Company. If the Executive’s employment is terminated by the Company, the Company shall pay to the Executive allcompensation to which the Executive is entitled through the date of termination, and thereafter, all of the Company’s obligations under this Agreement shallcease. 5.3 Voluntary Resignation. If the Executive terminates his employment voluntarily, then the Executive shall not be entitled to receivepayment of any severance benefits. The Company further shall have the option, in its sole discretion, to make the Executive’s termination effective at anytime prior to the end of notice period required under Section 5.1.2 as long as the Company provides Executive with all compensation to which he would beentitled for continuing employment through the last day of the notice period. Thereafter, all obligations of the Company under this Agreement shall cease. -2- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 5.4 Cause. Termination for “Cause” means termination of the Executive’s employment by the Company because of: (i) any act or omission that constitutes a breach by the Executive of any of his obligations under this Agreement or any Companypolicy or procedure and failure to cure such breach after notice of, and a reasonable opportunity to cure, such breach; (ii) the continued willful failure or refusal of the Executive to substantially perform the duties reasonably required of him as anemployee of the Company; (iii) an alleged act (with credible substantiated evidence) of moral turpitude, dishonesty, fraud or violation of law (whether or notconnected to the Company or its Affiliates (as defined in Section 8.1)) by, or criminal conviction of, the Executive which in the determination of the Board(in its sole discretion) would render his continued employment by the Company damaging or detrimental to the Company or its Affiliates in any way; or (iv) any misappropriation of Company property by the Executive. 6.DEATH OR DISABILITY In the event of termination of employment by reason of non-work-related death or Permanent Disability, the Executive (or his estate, as applicable)will be entitled to the Base Salary and benefits determined under Sections 3 and 4 through the date of termination. In the event of termination of employmentby reason of work related death or Permanent Disability, the Executive (or his estate, as applicable) will be entitled to the greater of (i) Base Salary andbenefits determined under Sections 3 and 4 through the date of termination, or (ii) the minimum compensation permitted by applicable law. Other benefitswill be determined in accordance with the benefit plans maintained by the Company, and the Company will have no further obligation hereunder. Forpurposes of this Agreement, “Permanent Disability” means a physical or mental disability or infirmity of the Executive that prevents the normal performanceof substantially all his duties as an employee of the Company, which disability or infirmity exists for any continuous period of 180 days. 7.CONFIDENTIALITY 7.1 Confidentiality. The Executive covenants and agrees with the Company that he will not at any time during the Term of Employment andthereafter, except in performance of his obligations to the Company hereunder or with the prior written consent of the Company, directly or indirectly,disclose any secret or confidential information that he may learn or has learned by reason of his association with the Company or any of its subsidiaries andAffiliates. The term “confidential information” includes information not previously made generally available to the public or to the trade by the Company’smanagement, with respect to the Company’s or any of its subsidiaries’ or Affiliates’ products, facilities, applications and methods, trade secrets and otherintellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information(including the revenues, costs or profits associated with any of the Company’s products), business plans, prospects or opportunities, but will exclude anyinformation which is or becomes generally available to the public or is generally known in the industry or industries in which the Company operates otherthan as a result of disclosure by the Executive in violation of his agreements under Section 7.1. The Executive will be released of his obligations under thisSection 7.1 to the extent the Executive is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal orauthority having jurisdiction in the matter or under subpoena or other process of law provided that the Executive provides the Company with prompt writtennotice of such requirement. For the purposes of this Agreement, “Affiliate” means, with respect to any person or entity, any other person or entity that isdirectly or indirectly through one or more intermediaries, controlled by, controlling or under common control with such person or entity. -3- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 7.2 Acknowledgment of Company Assets. The Executive acknowledges that the Company, at the Company’s expense, has acquired, createdand maintains, and will continue to acquire, create and maintain, significant goodwill with its current and prospective customers, vendors and employees,and that such goodwill is valuable property of the Company. The Executive further acknowledges that to the extent such goodwill will be generated throughthe Executive’s efforts, such efforts will be funded by the Company and the Executive will be fairly compensated for such efforts. The Executiveacknowledges that all goodwill developed by the Executive relative to the Company’s customers, vendors and employees will be the sole and exclusiveproperty of the Company and will not be personal to the Executive. 7.3 Exclusive Property. The Executive confirms that all confidential information is and will remain the exclusive property of the Company.All business records, papers and documents kept or made by Executive relating to the business of the Company will be and remain the property of theCompany, except for such papers customarily deemed to be the personal copies of the Executive. Upon termination of the Executive’s employment with theCompany for any reason, the Executive will promptly deliver to the Company all of the following that are in the Executive’s possession or under his control:(i) all computers, telecommunication devices and other tangible property of the Company and its Affiliates, and (ii) all documents and other materials, inwhatever form, which include confidential information or which otherwise relate in whole or in part to the present or prospective business of the Company orits Affiliates, including but not limited to, drawings, graphs, charts, specifications, notes, reports, memoranda, and computer disks and tapes, and all copiesthereof. 7.4 Communication to Third Parties. The Executive agrees that Company will have the right to communicate the terms of this Section 7 to anythird parties, including but not limited to, any prospective employer of the Executive. The Company waives any right to assert any claim for damages againstCompany or any officer, employee or agent of Company arising from such disclosure of the terms of this Section 7. 7.5 Independent Obligations. The provisions of this Section 7 will be independent of any other provision of this Agreement. The existence ofany claim or cause of action by the Executive against the Company, whether predicated on this Agreement or otherwise, will not constitute a defense of theenforcement of this Section 7 by the Company. 7.6 Non-Exclusivity. The Company’s rights and the Executive’s obligations set forth in this Section 7 are in addition to, and not in lieu of, allrights and obligations provided by applicable statutory or common law. 8.INDEMNIFICATION 8.1 Indemnification of the Executive. The Company agrees to indemnify Executive (and his heirs, executors, and administrators), and toadvance expenses related to this indemnification, to the fullest extent permitted under applicable law and regulations, against any and all expenses andliabilities that Executive reasonably incurs in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of hisservice as an Executive of the Company or any of its subsidiaries or Affiliates (whether or not he continues to be an Executive at the time of incurring anysuch expenses or liabilities). Covered expenses and liabilities include, but are not limited to, judgments, court costs, and attorneys’ fees and the costs ofreasonable settlements, subject to Board approval, if the action is brought against Executive in his capacity as an Executive of the Company or any of itssubsidiaries or Affiliates. Indemnification for expenses will not extend to matters related to Executive’s termination for Cause. Notwithstanding anything inthis Section 8.1 to the contrary, the Company will not be required to provide indemnification prohibited by applicable law or regulation. The obligations ofthis Section 8.1 will survive the term of this Agreement by a period of six (6) years. 8.2 Indemnification of the Company. The Executive will indemnify and keep the Company fully indemnified at all times from and against all claims, suits, proceedings, fines, punishment,loss, damage, costs and liabilities whatsoever incurred or sustained by the Company in connection with or arising out of or as a consequence of any breach bythe Executive of the confidentiality obligations set forth above. -4- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 9.FOREIGN CORRUPT PRACTICES ACT The Company and the Executive each represent and warrant that it is aware of and familiar with the provisions of the Foreign Corrupt Practices Act of1977, as amended by the Omnibus Trade and Competitiveness Act of 1988 (“FCPA”), and the rules and regulations thereunder, and its purpose. Each partyagrees that it will take no action and make no payment in violation of, or which might cause the Company or the Executive to be in violation of, the FCPA,including, but not limited to, the making of unlawful payments to foreign or domestic government officials or employees or to any foreign or domesticpolitical parties or campaigns from corporate funds. 10.MISCELLANEOUS 10.1 Severability. The parties intend this Agreement to be enforced as written. However, (i) if any portion or provision of this Agreement is toany extent be declared illegal or unenforceable by a duly authorized court having jurisdiction, then the remainder of this Agreement, or the application ofsuch portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, will not be affected thereby, and eachportion and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law and (ii) if any provision, or part thereof, is held tobe unenforceable because of the duration of such provision, the geographic area covered thereby, or other aspect of the scope of such provision, the courtmaking such determination will have the power to reduce the duration, geographic area of such provision, or other aspect of the scope of such provision,and/or to delete specific words and phrases (“blue-penciling”), and in its reduced or blue-penciled form, such provision will then be enforceable and will beenforced. 10.2 Assignment. The rights and obligations of this Agreement will bind and inure to the benefit of any successor of the Company byreorganization, merger or consolidation, or any assignee of all or substantially all of the Company’s business and properties. Neither this Agreement nor anyrights hereunder will be assignable or otherwise subject to hypothecation by the Executive. 10.3 Entire Agreement. This Agreement represents the entire agreement of the Company and the Executive and will supersede any and allprevious contracts, arrangements or understandings. [SIGNATURE PAGE FOLLOWS] -5- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. IN WITNESS WHEREOF, the Executive and the authorized representative of China Biologic Products Holdings, Inc., execute and enter into thisAgreement as of the date first written above. EXECUTIVE /s/ Huaming He Huaming He CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. By:/s/ Bing Li Name:Bing Li Title:Chief Executive Officer Date:December 3, 2018 -6- Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 8.1 CHINA BIOLOGIC PRODUCTS HOLDINGS, INCSubsidiaries of the Registrant Jurisdiction of Incorporation orName OrganizationTaibang Biological Ltd. British Virgin IslandsTaibang Holdings (Hong Kong) Limited Hong KongHealth Forward Holdings Limited Hong KongTianXinFu (Beijing) Medical Appliance Co., Ltd. PRCTaibang Biotech (Shandong) Co., Ltd. PRCTaibang (Beijing) Pharmaceutical Research Institute Co., Ltd. PRCShandong Taibang Biological Products Co., Ltd. PRCQihe Antai Plasma Co., Ltd. PRCXiajin Antai Plasma Co., Ltd. PRCZhangqiu Antai Plasma Co., Ltd. PRCLiaocheng Antai Plasma Co., Ltd. PRCYishui Taibang Plasma Co., Ltd. PRCHeze Antai Plasma Co., Ltd. PRCNingyang Taibang Plasma Co., Ltd. PRCCao Xian Taibang Plasma Co., Ltd. PRCTaibang Biologic Plasma Co., Ltd., Fangcheng District, Fangchenggang City PRCHuanjiang Taibang Plasma Co., Ltd. PRCYuncheng Ziguang Biologic Technology Zone Co., Ltd. PRCZaozhuang Taibang Plasma Co., Ltd. PRCXinglong Xian Taibang Plasma Co., Ltd. PRCDaming Xian Taibang Plasma Co., Ltd. PRCJu Xian Taibang Plasma Co., Ltd PRCGuiyang Dalin Biologic Technologies Co., Ltd. PRCGuizhou Taibang Biological Products Co., Ltd. PRCGuizhou Qianfeng Renyuan Bio Material Co., Ltd. PRCPuding Xian Taibang Plasma Co., Ltd. PRCHuangping Xian Taibang Plasma Co., Ltd. PRCDanzhai Xian Qianfeng Plasma Co., Ltd. PRCNayong Xian Qianfeng Plasma Co., Ltd. PRCSansui Xian Qianfeng Plasma Co., Ltd. PRCWeining Xian Qianfeng Plasma Co., Ltd. PRCZhenyuan Xian Qianfeng Plasma Co., Ltd. PRCHainan Wenchang Taibang Plasma Co., Ltd PRCWeifang Linqu Taibang Plasma Co., Ltd. PRCTaina Dabang (Shanghai) Medical Technology Co., Ltd. PRC Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 11.1 CODE OF ETHICS OF CHINA BIOLOGIC PRODUCTS HOLDINGS, INC. I.Objectives China Biologic Products Holdings, Inc. and its subsidiaries (together, the “Company”) is committed to the highest level of ethical behavior. The Company’sbusiness success depends upon the reputation of the Company and its directors, officers and employees to perform with the highest level of integrity andprincipled business conduct. This Code of Ethics (“Code”) applies to all directors, officers and employees of the Company, including the Company’s principal executive officer andprincipal financial officer, (collectively, the “Covered Persons”). This Code is designed to deter wrongdoing and to promote all of the following: ·honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professionalrelationships; ·full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities andExchange Commission (the “Commission”), and in other public communications made by the Company; ·compliance with applicable governmental laws, rules and regulations; ·the prompt internal reporting to an appropriate person or persons identified herein for receiving notice of violations or potential violations of thisCode; and ·accountability for adherence to this Code. Current versions of the Code will be maintained on the Company’s Website and distributed periodically to all Covered Persons. Compliance with the Codeis, first and foremost, the individual responsibility of every Covered Person. This Code is not intended to cover every applicable law, or to provide answers to all questions that might arise; for such, the Company relies on eachperson’s sense of what is right, including a sense of when it is appropriate to seek guidance from others on an appropriate course of conduct. II.Honest And Ethical Conduct Each Covered Person must always conduct himself or herself in an honest and ethical manner. Each Covered Person must act with the highest standards ofpersonal and professional integrity and must not tolerate others who attempt to deceive or evade responsibility for actions. Honest and ethical conduct mustbe a driving force in every decision made by a Covered Person while performing his or her duties for the Company. When in doubt as to whether an action ishonest and ethical, each Covered Person shall seek advice from his or her immediate supervisor or senior management, as appropriate. III.Conflicts Of Interest The term “conflict of interest” refers to any circumstance that would cast doubt on a Covered Person’s ability to act objectively when representing theCompany’s interest. Covered Persons should not use their position or association with the Company for their own or their family’s personal gain, and shouldavoid situations in which their personal interests (or those of their family) conflict or overlap, or appear to conflict or overlap, with the Company’s bestinterests. 1 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The following are examples of activities that give rise to a conflict of interest. These examples do not in any way limit the general scope of the Company’spolicy regarding conflicts of interest. ·Where a Covered Person’s association with (or financial interest in) another person or entity would reasonably be expected to interfere with theCovered Person’s independent judgment as to the Company’s best interest, that association or financial interest creates a conflict of interest. ·The holding of a financial interest by a Covered Person in any present or potential competitor, customer, supplier, or contractor of the Companycreates a conflict of interest, except where the business or enterprise in which the Covered Person holds such financial interest is publicly owned,and the financial interest of the Covered Person in such public entity constitutes less than one percent (1%) of the ownership of that business orenterprise. ·The acceptance by a Covered Person of a membership on the board of directors, or serving as a consultant or advisor to any board or anymanagement, of a business that is a present or potential competitor, customer, supplier, or contractor of the Company, creates a conflict of interest,unless such relationship is pre-approved in writing by the principal executive officer of the Company. ·Engaging in any transaction involving the Company, from which the Covered Person can benefit financially or otherwise, apart from the usualcompensation received in the ordinary course of business, creates a conflict of interest. Such transactions include lending or borrowing money,guaranteeing debts, or accepting gifts, entertainment, or favors from a present or potential competitor, customer, supplier, or contractor of theCompany. ·The use or disclosure of any unpublished information regarding the Company, obtained by a Covered Person in connection with his or heremployment for personal benefit, creates a conflict of interest. It is our policy and it is expected that all Covered Persons should endeavor to avoid all situations that present an actual or apparent conflict of interest. Allactual or apparent conflicts of interest must be handled honestly and ethically. If a Covered Person suspects that he or she may have a conflict of interest,that Covered Person is required to report the situation to, and to seek guidance from, his or her immediate supervisor or senior management, as appropriate.For purposes of this Code, directors, the principal executive officer, and the principal financial officer shall report any such conflict or potential conflictsituations to the chairman of the Audit Committee, if one is created, and in the absence of an Audit Committee, to chairman of the board of directors of theCompany (the “Board”). Officers (other than the principal executive officer and principal financial officer) and employees of the Company shall report anysuch situations to their immediate supervisor. It is the responsibility of the Audit Committee chairman or the chairman of the Board, as applicable, todetermine if a conflict of interest exists or whether such situation is likely to impair the Covered Persons ability to perform his or her assigned duties withthe Company, and if such situation is determined to present a conflict, to determine the necessary resolution. IV.Compliance with Applicable Laws, Rules and Regulations Full compliance with the letter and the spirit of all applicable governmental laws, rules and regulations, and applicable rules and listing standards of anynational securities exchange on which the Company’s securities may be listed, is one of the foundations on which this Company’s ethical policies are built.All directors and executive officers of the Company must understand and take responsibility for the Company’s compliance with the applicablegovernmental laws, rules and regulations of the cities, states and countries in which the Company operates, and for complying with the applicable rules andlisting standards of any national securities exchange on which the Company’s securities may be listed. 2 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. V.Rules to Promote Full, Fair, Accurate, Timely and Understandable Disclosure As a public Company, the Company has a responsibility to report financial information to security holders so that they are provided with accurateinformation in all material respects about the Company’s financial condition and results of operations. It is the policy of the Company to fully and fairlydisclose the financial condition of the Company in compliance with applicable accounting principles, laws, rules and regulations. Further, it is theCompany’s policy to promote full, fair, accurate, timely and understandable disclosure in all Company reports required to be filed with or submitted to theCommission, as required by applicable laws, rules and regulations then in effect, and in other public communications made by the Company. Covered Persons may be called upon to provide or prepare necessary information to ensure that the Company’s public reports are complete, fair andunderstandable. The Company expects Covered Persons to take this responsibility seriously and to provide accurate information related to the Company’spublic disclosure requirements. All books and records of the Company shall fully and fairly reflect all Company transactions in accordance with accounting principles generally acceptedin the United States of America, and any other financial reporting or accounting regulations to which the Company is subject. No entries to the Company’sbooks and records shall be made or omitted to intentionally conceal or disguise the true nature of any transaction. Covered Persons shall maintain allCompany books and records in accordance with the Company’s established disclosure controls and procedures and internal controls for financial reporting,as such controls may be amended from time to time. The Company is committed to develop and operate a system of internal control policy over financial reporting and accounting record, to ensure all internaltransactions are properly authorized and recorded, and are compliant with all applicable laws. The internal controls include but are not limited to writtenpolicies and procedures, superior examination and monitoring, budget control and other inspection and settlement. The Company is committed to developand operate a system of disclosure procedures to ensure that all information is disclosed in accordance with applicable rules and regulations. All Covered Persons must report any questionable accounting or auditing matters that may come to their attention. This applies to all reports or recordsprepared for internal or external purposes. If any Covered Person has concerns or complaints regarding questionable accounting or auditing matters of theCompany, Covered Person shall report such matters to his or her immediate supervisor. If the immediate supervisor is involved in the questionableaccounting or auditing matter, or does not timely resolve the Covered Person’s concern, the Covered Person should submit their concerns to the principalexecutive officer or the principal financial officer. If the principal executive officer and the principal financial officer are involved in the questionableaccounting or auditing matter, or do not timely resolve the Covered Person’s concerns, the Covered person should submit his or her concern directly to theAudit Committee, if one be established, or to the Board in the absence of a designated Audit Committee. The reporting of any such matters may be done ona confidential basis, at the election of the Covered Person making the report. VI.Competition and Fair Dealing The Company seeks to outperform its competitors fairly and honestly. The Company does not seek competitive advantages through illegal or unethicalbusiness practices. Each Covered Person shall endeavor to deal fairly with the Company’s customers, service providers, suppliers, competitors andemployees. No Covered Person shall take unfair advantage of anyone through manipulation, concealment, abuse of privileged information,misrepresentation of material facts or any unfair dealing practice. 3 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantagewith customers. No gift or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee oragent unless it: (i) is not a cash gift, (ii) is consistent with customary business practices, (iii) is not excessive in value, (iv) cannot be construed as a bribe orpayoff, and (v) does not violate any laws or regulations. Please discuss with the Company’s Chief Financial Officer any gifts which you are not certain areappropriate. VII.Corporate Opportunities Covered Persons are prohibited from taking for themselves opportunities that are discovered through the use of Company property, information or position,or using Company property, information or position for personal gain. Covered Persons have a duty to the Company to advance its legitimate interest whenthe opportunity to do so arises. VIII.Confidentiality Covered Persons must maintain the confidentiality of non-public, proprietary information regarding the Company, its customers or its suppliers, and shalluse that information only to further the business interests of the Company, except where disclosure or other use is authorized by the Company or legallymandated. This includes information disseminated to employees in an effort to keep them informed or in connection with their work activities, but with theinstruction, confidential labeling, or reasonable expectation that the information be kept confidential. IX.Trading on Inside Information Inside information includes any non-public information, whether favorable or unfavorable, that investors generally consider important in makinginvestment decisions. Examples include financial results not yet released, imminent regulatory approval/disapproval of an alliance or other significantmatter such as the purchase or sale of a business unit or significant assets, threatened litigation, or other significant facts about a business. No informationobtained as the result of employment at, or a director’s service on the Board of, the Company may be used for personal profit or as the basis for a “tip” toothers, unless such information has previously been made generally available to the public, and even in such circumstances, such information may besubject to other duties. X.Protection and Proper Use of Company Assets Covered Persons should protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have an adverse impact on the Companyand its profitability. Company assets may only be used for legitimate Company business purposes. XI.Foreign Corrupt Practices Act (“FCPA”) The FCPA prohibits the making of a payment and/or the offering of anything of value to any foreign government official, government agency, politicalparty or political candidate in exchange for a business favor or when otherwise intended to influence the action taken by any such individual or agency orto gain any competitive or improper business advantage. Prohibitions of the FCPA apply to actions taken by all Covered Persons and by all outside partiesengaged directly or indirectly by the Company (e.g., consultants, professional advisers, etc.). Given the complexity of the FCPA and the severe penaltiesassociated with its violation, all Covered Persons are urged to contact the Company’s Chief Financial Officer at any time with any questions concerning theCompany’s and their obligations under and in compliance with the FCPA. 4 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. XII.Fair treatment The Company is firmly committed to providing equal opportunity to all employees and will not tolerate any illegal discrimination or harassment based onnationality, national origin, sex, religion or any other protected class, avoid any discrimination or harassment for psychological or physiological defect. The Company strives to provide each employee with a safe and healthy work environment. Regardless of the status of the employee, the Company prohibitsany sexual harassment to employees of opposite sex through body or language. Violence and threatening behavior are not permitted. XIII.Compliance with the Code; Discipline Violation of this Code may result in serious consequences for the Company, its corporate reputation and credibility and the confidence level of itscustomers and investors. Sanctions against the Company for criminal or civil wrongdoing could include substantial fines and restrictions on futureoperations. Individual employees could be required to pay significant fines or be sentenced to prison. Therefore, violations will be taken seriously. Company-imposed disciplinary action will be coordinated with the employee’s supervisor, the human resources department and the Chief Financial Officerof the Company. The overall seriousness of the matter will be considered in determining disciplinary action to be taken, which might include consequencesup to and including dismissal. Individual cases may require an employee to reimburse the Company for losses or damages. The Company may even refer an employee for criminalprosecution, civil enforcement or a combination of the above. Disciplinary action may also be taken against Covered Persons who condone, permit or have knowledge of illegal or unethical conduct by subordinates anddo not take corrective action, and against Covered Persons who make false statements in connection with investigations of violations of this Code. All Covered Persons will be held to the standards in this Code. Violating the Code, even if directed to do so by management is not justifiable. If a managersolicits actions in violation of this Code, the Covered Person should contact the Company’s Chief Financial Officer. XIV.Reporting and Compliance procedure Every Covered Person has the responsibility to ask questions, seek guidance, report suspected violations and express concerns regarding compliance withthis Code. The Company’s Chief Financial Officer can be reached for explanation, clarification, and guidance of this Code at 86 (10) 6598 3166(telephone), yangming@chinabiologic.com (email), or his/her office. Any employee, officer or director who knows or believes that any other employee orrepresentative of the Company has engaged or is engaging in Company-related conduct that violates applicable law or this Code should report suchinformation to the Chief Financial Officer. Covered Persons may report such conduct openly or anonymously without fear of retaliation. The Company willnot discipline, discriminate against or retaliate against any employee who reports such conduct, unless it is determined that the report was made withknowledge that it was false, or who cooperates in any investigation or inquiry regarding such conduct. Any supervisor who receives a report of a violationof this Code must immediately inform the Chief Financial Officer. 5 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Covered Persons may report violations of this Code on a confidential or anonymous basis, while the Company encourages reporting person to identifyhimself or herself when reporting violations so that the Company may follow up with the reporting person, as necessary, for additional information. CoveredPerson may report to the Chief Financial Officer through any of the following means: By post: 18th Floor, Jialong International Building, 19 Chaoyang Park Road Chaoyang District, Beijing, PRC 100125By Call/ Fax: 86 (10) 6598 3166(You can leave a recorded message without identifying yourself)By Email: yangming@chinabiologic.com If the Chief Financial Officer receives information regarding an alleged violation of this Code, he or she shall, in consultation with outside counsel, asappropriate, (a) evaluate such information, (b) if the alleged violation involves an executive officer or a director, inform the Chief Executive Officers and theBoard of the alleged violation, (c) determine whether it is necessary to conduct an informal inquiry or a formal investigation and, if so, initiate such inquiryor investigation and (d) report the results of any such inquiry or investigation, together with a recommendation as to disposition of the matter, to the ChiefExecutive Officers for action, or if the alleged violation involves an executive officer or a director, report the results of any such inquiry or investigation tothe Board or a committee thereof. Covered Persons are expected to cooperate fully with any inquiry or investigation by the Company regarding an allegedviolation of this Code. Failure to cooperate with any such inquiry or investigation may result in disciplinary action, up to and including discharge. The Company shall determine whether violations of this Code have occurred and, if so, shall determine the disciplinary measures to be taken against anyemployee who has violated this Code. In the event that the alleged violation involves an executive officer or a director, the Chief Executive Officers and theBoard, respectively, shall determine whether a violation of this Code has occurred and, if so, shall determine the disciplinary measures to be taken againstsuch executive officer or director. Failure to comply with the standards outlined in this Code will result in disciplinary action including, but not limited to, reprimands, warnings, probation orsuspension without pay, demotions, reductions in salary, discharge and restitution. Certain violations of this Code may require the Company to refer thematter to the appropriate governmental or regulatory authorities for investigation or prosecution. Moreover, any supervisor who directs or approves of anyconduct in violation of this Code, or who has knowledge of such conduct and does not immediately report it, also will be subject to disciplinary action, upto and including discharge. XV.Waiver of the Code While some of the policies contained in this Code must be strictly adhered to and no exceptions can be allowed, in other cases exceptions may be possible.Any request for a waiver of any provision of this Code must be in writing and addressed to the Board or the Audit Committee (if one be established), if madeby an executive officer or a director, or the Chief Executive Officer of the Company, if made by an employee. Any waiver of this Code may be made only by the independent directors on the Board, or by an authorized committee of the Board comprised solely ofindependent directors, and will be disclosed as required by law, Commission regulations, or the rules and listing standards of any national securitiesexchange on which the Company’s securities may be listed. Any waiver of this Code with respect to an officer or director must be approved by the Board or the Audit Committee, after consultation with the Company’scorporate or outside counsel, and will be disclosed as required by law, Commission regulations, or the rules and listing standards of any national securitiesexchange on which the Company’s securities may be listed. XVI.Dissemination and Amendment This Code shall be distributed to each employee, officer and director of the Company upon commencement of his or her employment or other relationshipwith the Company. The Company reserves the right to amend, alter or terminate this Code at any time for any reason. Adopted by the Board of Directors effective as of March 4, 2019. 6 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 12.1 Certification by the Chief Executive OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Bing Li, certify that: 1.I have reviewed this annual report on Form 20-F of China Biologic Products Holdings, Inc. (the “Company”); 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; 4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by theannual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;and 5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theCompany’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internalcontrol over financial reporting. Date: March 6, 2019 By:/s/ Bing Li Name:Bing Li Title:Chief Executive Officer Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 12.2 Certification by the Chief Financial OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Ming Yang, certify that: 1.I have reviewed this annual report on Form 20-F of China Biologic Products Holdings, Inc. (the “Company”); 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; 4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by theannual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;and 5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theCompany’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internalcontrol over financial reporting. Date: March 6, 2019 By:/s/ Ming Yang Name: Ming Yang Title: Chief Financial Officer Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 13.1 Certification by the Chief Executive OfficerPursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Annual Report of China Biologic Products Holdings, Inc. (the “Company”) on Form 20-F for the year ended December 31, 2018as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bing Li, Chief Executive Officer of the Company, certify, pursuantto 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 6, 2019 By:/s/ Bing Li Name: Bing Li Title: Chief Executive Officer Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 13.2 Certification by the Chief Financial OfficerPursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Annual Report of China Biologic Products Holdings, Inc. (the “Company”) on Form 20-F for the year ended December 31, 2018as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ming Yang, Chief Financial Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 6, 2019 By/s/ Ming Yang Name: Ming Yang Title: Chief Financial Officer Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 15.1 Consent of Independent Registered Public Accounting Firm The Board of DirectorsChina Biologic Products Holdings, Inc. We consent to the incorporation by reference in the Registration Statement (No. 333-151263) on Form S-8 (as amended by Post-Effective Amendment No. 1)of China Biologic Products Holdings, Inc. (the “Company”) of our reports dated March 6, 2019, with respect to the consolidated balance sheets of theCompany as of December 31, 2018 and 2017, and the related consolidated statements of comprehensive income, changes in equity and cash flows for each ofthe years in the three-year period ended December 31, 2018 and the related notes (collectively, the “consolidated financial statements”), and the effectivenessof internal control over financial reporting as of December 31, 2018, which reports appear in the December 31, 2018 annual report on Form 20-F of theCompany. Our report on the consolidated financial statements refers to a change in the Company’s method of accounting for revenue recognition in 2018 due to theadoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), as amended. Our report on the effectiveness of internal control over financial reporting as of December 31, 2018 contains an explanatory paragraph that states that theCompany acquired TianXinFu (Beijing) Medical Appliance Co., Ltd. (“TianXinFu”) during 2018, and management excluded from its assessment of theeffectiveness of the Company’s internal control over financial reporting as of December 31, 2018, TianXinFu’s internal control over financial reportingassociated with total assets of $348,885,628 and total revenues of $44,711,325 included in the consolidated financial statements of the Company as of andfor the year ended December 31, 2018. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internalcontrol over financial reporting of TianXinFu. /s/ KPMG Huazhen LLP Beijing, China March 6, 2019 Source: China Biologic Products Holdings, Inc., 20-F, March 06, 2019Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.28 Annual Report 2018 Annual Report 2018 225 Corporate Information China Biologic Products Holdings, Inc. Room 1801, 19 Chaoyang Park Road Chaoyang District, Beijing 100125 People’s Republic of China ir@chinabiologic.com Transfer Agent Securities Transfer Corporation 2591 Dallas Parkway, Suite #102, Frisco, Texas, 75034 Tel: 469-633-0101 Market Data Exchange: NASDAQ Ticker: CBPO Website www.chinabiologic.com Legal Counsel Davis Polk & Wardwell, Hong Kong Solicitors Independent Auditor KPMG IR Agent The Foote Group Philip Lisio +86-135-0116-6560 phil@thefootegroup.com China Biologic Products Holdings, Inc. Address: 18th Floor, 19 Chaoyang Park Road Chaoyang District, Beijing 100125 People’s Republic of China ir@chinabiologic.com Web site: www.chinabiologic.com 

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