China Health Labs & Diagnostics Ltd. announces $10.1 million sales order for its food safety business

    




 TSX-V: CHO OTCQX: CHLBF 

 TORONTO, Nov. 28, 2011 /CNW/ - China Health Labs & Diagnostics Ltd.  ("China Health" or the "Company") , is pleased to announce  that it has secured a sales order of RMB 61.5 million ($10.1 million)  for food safety testing equipment, lab management system ("LMS")  software and hardware, and installation services from the Beijing  municipal government, through a bidding agent, Oriental Scientific  Instruments Import and Export Corporation.  The sales order is for  delivery in 2011, and includes a LMS software developed by the Company  to connect all the Beijing food safety labs, enabling more efficient  communications and operations. 

 This sales order represents growth of 100% for the food safety business  compared to 2010, when the Company had revenues of $33.7 million of  which 15% or $5.5 million was from the food safety business. 

 "Improving food safety is a high priority for the Chinese government at  the central and municipal levels. The Chinese government established  the State Council Food Safety Commission last year and this year, the  SCFSC announced a five-year program for food safety education," said  Wilson Yao, CEO of China Health.  "We have used our expertise in lab  management and design to assist the Beijing municipal government to  establish an effective network of food testing labs that operate with  our proprietary lab management system.  In the future, we plan to use  our track record in Beijing as a reference to expand our food safety  sales to other cities in China." 

 In 2008, China Health entered the food safety market by installing  food-testing labs mandated and paid for by the Beijing municipal  government in response to concerns due to the growing number of high  profile food safety incidents and the need to improve safety for the  Beijing Olympics.  In 2009 and 2010, the Company developed and provided  food safety lab solutions, including the Company's proprietary LMS  software, for major food distribution centres in Beijing and a mobile  lab solution based on the need for on-site rapid testing, which  generated increasing revenues in each year.  Currently, the Company's  food safety lab solutions test for, among other things: (1) heavy metal  residue, such as mercury, cadmium and lead; (2) pesticide residue, such  as alpha-BHC, formothion, oryzalin, pyraflufen-ethyl, DDT and  nitenpyram; (3) veterinary drug residue, such as ampicillin,  amoxicillin, altrenogest and bacitracin; (4) pathogenic  micro-organisms, such as salmonella, shigella, vibrio parahaemolyticus  and clostridium botulinum; and (5) poisonous food additives, such as  lean meat powder, melamine, plasticizer and malachite green. The food  safety lab solutions include equipment assembled at the Company's  Beijing manufacturing facility and sourced from other manufacturers. To  date, China Health has installed 17 major labs, 250 mini-labs (in food  distribution and manufacturing facilities) and supplied 17 mobile labs  to the Beijing municipal government to improve food safety. 

 About China Health Labs & Diagnostics Ltd. 

 China Health, operating in China as the Biochem Group, is a leading  diagnostic lab solution provider for the public healthcare industry in  China. The Company develops and sells Biochem Group branded and  third-party medical diagnostic products and services to diagnostic  facilities in China. Customers include large urban hospitals, rural  hospitals, Chinese military and rescue operations, the Beijing  government and third-party distributors. 

 In 2010, China Health had revenues of approximately $33.7 million, and  intends to expand its business by focusing its efforts on expanding its  sales network in three areas where it provides proprietary solutions,  has limited competition and which are supported by Chinese government  policies and budgets: BK Clinlab total lab solutions for rural  hospitals and clinics, food safety solutions for military and emergency  rescue services, and food safety solutions for large cities in China. 

 Neither TSX Venture Exchange nor its Regulation Services Provider (as  that term is defined in the policies of the TSX Venture Exchange)  accepts responsibility for the adequacy or accuracy of this release. 

 FORWARD LOOKING INFORMATION AND NON-GAAP MEASURES 

 This press release contains forward-looking statements and information  that are based on the beliefs of management and reflect China Health's  current expectations.  When used in this press release, the words  "estimate", "project", "belief", "anticipate", "intend", "expect",  "plan", "predict", "may" or "should" and the negative of these words or  such variations thereon or comparable terminology are intended to  identify forward-looking statements and information.  The  forward-looking statements and information in this press release  includes information relating to sales of food safety products, the  delivery schedule of food safety products, and the revenue and profit  growth of food safety products.  The forward-looking information is  based on certain assumptions, which could change materially in the  future, including the assumption that the orders for food safety  products will result in sales, payment and revenue recognition, the  delivery of food safety products will be on schedule, and food safety  products will be key drivers of the Company's revenue and profit  growth.  Such statements and information reflect the current view of  China Health with respect to risks and uncertainties that may cause  actual results to differ materially from those contemplated in those  forward-looking statements and information.  By their nature,  forward-looking statements involve known and unknown risks,  uncertainties and other factors which may cause our actual results,  performance or achievements, or other future events, to be materially  different from any future results, performance or achievements  expressed or implied by such forward-looking statements.  Such factors  include, among others, the risks that the food safety product orders  from may not result in sales, the Company may not be able to deliver  the food safety products on schedule, and the Company's food safety  products may not contribute to revenue and profit growth as expected.   China Health cautions that the foregoing list of material factors is  not exhaustive.  When relying on China Health's forward-looking  statements and information to make decisions, investors and others  should carefully consider the foregoing factors and other uncertainties  and potential events.  China Health has assumed a certain progression,  which may not be realized.  It has also assumed that the material  factors referred to above will not cause such forward-looking  statements and information to differ materially from actual results or  events.  However, the list of these factors is not exhaustive and is  subject to change and there can be no assurance that such assumptions  will reflect the actual outcome of such items or factors. 

 China Health has also included in this press release figures based on  orders received, which is a non-GAAP measure.  Readers are cautioned  that such a measure is not recognized under Canadian GAAP and should  not be construed to be an indicator of performance or liquidity or cash  flows.  China Health's method of calculating this measure may differ  from the method used by other entities and accordingly China Health's  measure may not be comparable to the measure used by other entities. 

 THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE  REPRESENTS THE EXPECTATIONS OF CHINA HEALTH AS OF THE DATE OF THIS  PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE.   READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING  INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER  DATE.  WHILE CHINA HEALTH MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE  THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN  ACCORDANCE WITH APPLICABLE LAWS. 

CHINA HEALTH LABS & DIAGNOSTICS


CONTACT:  Judyanna ChenChief Financial OfficerChina Health Labs & Diagnostics Ltd.T: [phone]Email: [e-mail] PedramInvestor RelationsTMX EquicomT: [phone] ext. 264Email: [e-mail] 


    

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