China Medical Technologies prices $125 million convertible senior notes offering

China Medical Technologies, Inc. (the "Company") (Nasdaq: CMED), a leading China-based advanced in-vitro diagnostic ("IVD") company, today announced that it increased the size of its previously announced offering of convertible senior notes. On November 30, 2010, the Company priced US$125 million in aggregate principal amount of convertible senior notes due 2016 at an issue price of 100%. The transaction is expected to close on December 6, 2010, subject to satisfaction of various customary closing conditions. The Company has granted to the initial purchaser an option to purchase up to an additional US$25 million principal amount of notes solely to cover over-allotments. The Company intends to use the net proceeds from the offering to repurchase, from time to time, its outstanding convertible notes, to pay for its expenses associated with the capped call transaction described below and for general corporate purposes.

The notes will be the Company's senior unsecured obligations and will rank equally in right of payment with all of its existing and future senior unsecured indebtedness. The notes will bear interest at the rate of 6.25% per year, payable semiannually on June 15 and December 15 of each year, beginning June 15, 2011. The notes will mature on December 15, 2016. Holders may initially convert their notes into the Company's American Depositary Shares ("ADSs") at a conversion rate of 68.6189 ADSs per US$1,000 principal amount of notes (representing an initial conversion price of approximately US$14.57 per ADS and a conversion premium of approximately 27.5% based on the closing sale price of the Company's ADSs on the Nasdaq Global Select Market on November 30 of US$11.43 per ADS).  The initial conversion rate is subject to adjustment under certain circumstances.  The notes will be convertible into the Company's ADSs at any time prior to the close of business on the business day immediately preceding the maturity date of the notes.

The notes will be subject to redemption at the Company's option, in whole or in part, on or after December 15, 2013 at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, to, but excluding, the redemption date, if the closing sale price of the Company's ADSs exceeds 130% of the applicable conversion price for at least 20 trading days within a period of any 30 consecutive trading days ending on the trading day prior to the date on which the Company mails the redemption notice.  If the Company experiences a fundamental change, holders may require it to purchase for cash all or a portion of such holder's notes, at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest, to, but excluding, the fundamental change purchase date.

In connection with the offering, the Company has entered into a capped call transaction relating to US$100 million in principal amount of the notes with an affiliate of the initial purchaser.  The Company does not expect to enter into additional capped call transactions in connection with this offering. The capped call transaction is expected generally to reduce the potential dilution of the Company's ADSs upon a conversion of notes in the event that the market value per ADS of the Company, as measured under the terms of the capped call transaction, is greater than the strike price of the capped call transaction (which corresponds to the initial conversion price of the notes and is subject to certain adjustments similar to those contained in the notes). The capped call transaction has a cap price equal to approximately US$17.15 (50% above the closing sale price of the Company's ADSs on the Nasdaq Global Select Market on November 30, 2010).

The Company has been advised that, in connection with hedging the capped call transaction, the hedge counterparty or its affiliates expect to enter into various derivative transactions with respect to the Company's ADSs concurrently with, or shortly after, the pricing of the notes and may, from time to time following the pricing of the notes, enter into or unwind various derivatives and/or purchase or sell the Company's ADSs in secondary market transactions. These activities could increase (or reduce the size of any decrease in) the price of the Company's ADSs concurrently with or following the pricing of the notes, and may also cause an increase or a decrease in the price of the Company's ADSs following any conversion of notes and during the period prior to, at or following the maturity date.

The notes and any ADSs issuable upon conversion of the notes, including the ordinary shares represented by such ADSs, will not be and have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities law, and may not be offered or sold in the United States or to any U.S. persons absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes will be offered only to "qualified institutional buyers" under Rule 144A of the Securities Act.