Chindex was founded in June 1981 to take advantage of the marketing opportunities presented by the commercial opening of China to the West in the late 1970s and early 1980s. The Company opened initial offices in Beijing and New York in order to provide representative services, including product marketing, sales, distribution, and technical support to Western manufacturers of electronic instrumentation and industrial machinery.

During its early years of operation, Chindex began work in the healthcare and industrial machinery market sectors. Relationships were initiated with manufacturers of a variety of capital medical instrumentation and off-road construction and mining machinery. By the end of its second year, the Company had hired its first in-house technical support engineer in order to provide service in connection with its sales. By 1985, the Company had developed an organizational structure which consisted of two discrete marketing groups: capital healthcare equipment and industrial machinery. The Company has been continually active in pursuit of new product areas, technologies, and emerging market segments in China.

In response to the fast-paced development of the Chinese market-oriented economic reforms through the mid-1980s, the Company opened regional offices in Guangzhou (southern China) and Shanghai (central China) to expand its sales capabilities. In addition, to expand its technical service capabilities, Chindex opened its first joint venture, the Chindex Meheco Service Center, which provided access to bonded warehouse facilities for the importation of spare parts inventories utilized by the Technical Service operations of the Company. As the Chinese economy has continued to show exceptional growth rates into the 1990s and into the 21st century, Chindex has pursued the expansion of its business operations through staff and facilities expansion, as well as increased product offerings. The regional offices support a network of territory sales managers, local area regional representatives, and technical service engineers throughout the country.

In order to increase the Company�s overall market access in China, Chindex opened its first foreign subsidiary, Chindex Tianjin, in the Tianjin Free Trade Zone in 1994. A related subsidiary, Chindex Shanghai, was opened in the Waigaoqiao Free Trade Zone of Shanghai, in mid-1998. The subsidiaries are managed by the Products Distribution Department and provide Chindex with a unique nationwide distribution system for off-the-shelf medical devices and consumables used in hospitals as well as over-the-counter (OTC), home healthcare, and health-oriented products sold to consumers in retail pharmacies.

In early 1996, Chindex established operations in Hong Kong through another foreign subsidiary, Chindex Hong Kong. This subsidiary has been staffed initially for sales and technical support in the healthcare sectors of the Hong Kong market.

Chindex is committed to the long term growth potential of the China marketplace. Throughout its twenty year history, the Company has taken extraordinary care to maintain a balance of administrative, sales, and technical support capabilities in each product sector and geographic area over the course of its development.

To provide funding for growth initiatives and to capitalize on its sustained investment and long-term management expertise in China, Chindex has successfully completed two public offerings. The first, in August of 1994, raised approximately $7.4 million and the second, in November of 1996, raised approximately $10 million. This funding base has allowed the Company to initiate and develop an aggressive growth plan based on expansion of its traditional healthcare equipment sales and service operations, development of primary healthcare ventures, expansion of product distribution capabilities in healthcare products, and investment in the growth of the Hong Kong market services.

To address the long-term financing needs of its customers in the China marketplace, Chindex has been a leader in working with the U.S. Government to utilize direct loan and loan guarantee programs to extend financing to Chinese buyers through the Chinese Ministry of Public Health. In 1995-96, Chindex exported a package of $8.4 million of medical equipment to various hospitals throughout China financed through a tied aid loan from the Export-Import Bank of the United States (Ex-Im Bank). The loan program was initiated in response to preferential financing offered by Austrian competitors. In 1998-99, Chindex exported $14.0 million of medical equipment to Chinese hospitals, financed by commercial bank loans, guaranteed by Ex-Im Bank. Chindex is now in the process of implementing a third loan program, with a total value of up to $30.0 million in medical equipment exports, the first tranche of which, for medical equipment with a value of $11.6 million, shipped in late 2000 and early 2001. The second tranche of this program, for medical equipment with a value of $4.3 million, was a purely commercial transaction which began shipping in late 2001. These transactions have helped to sustain Chindex�s competitive advantage in the face of increased competition from European competitors in the China marketplace.

In September of 1997, Chindex opened Beijing United Family Hospital (Beijing United), a joint venture between Chindex and the Chinese Academy of Medical Sciences. Chindex invested approximately $4.0 million in the Beijing United project, which has brought a unique international-standard family hospital to China. The Chindex multi-year development plan includes a series of family hospitals and clinics in major metropolitan centers in China over the next several years as it establishes itself as the premier private hospital corporation in China. The second such hospital has received Chinese Ministry of Health approval and is expected to open in Shanghai in late 2002.

At the end of 1997, Chindex announced a significant restructuring of Company operations to focus exclusively on its strengths in the healthcare industry. Chindex has substantially phased out its involvement in the industrial sector. Chindex believes that this strategic positioning will allow it to focus its efforts and investment into healthcare-related products and services, thereby strengthening the Company�s position as it enters the next century of growth in Asia.

Chindex has recognized from its inception that the key to long term success in the China market is strategic long-term product positioning, unwavering dedication to customer service, and a commitment to day-to-day flexibility in the marketplace. This fundamental business philosophy is reflected in the Mission Statement which is common to all Chindex companies and ventures:

Prosper as a Cross Cultural Company
By Providing Leading Edge Technologies,
Quality Products and Services
to Greater China's Professional Communities with Pride.

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