DKSP Reports Q3 Results

XI'AN, China, Nov.29, 2010 /PRNewswire-Asia/ -- DK Sinopharma, Inc. (OTC Bulletin Board: DKSP) ("DK Sinopharma" or the "Company"), announced its third quarter 2010 financial results. The Company's quarterly report on Form 10-Q was filed with the U.S. Securities & Exchange Commission on November 22, 2010.

Third Quarter 2010 Highlights

Sales increased by 66% year-over-year to $7,290,685.

Gross profit increased by 58% year-over-year to $3,088,846.

Net Income increased to $2,191,362 or a 139% year-over-year increase.

Earnings per share increased by $0.04 to $0.07 per share

"We are very pleased with our third quarter results and we are confident we will be able to continue our growth in sales and profit by expanding our market share and increasing our brand recognition. Our product lines are becoming increasingly visible in hospitals across China," stated Professor Dongke Zhao, President, Chief Executive Officer and Chairman of DK Sinopharma, Inc.

Third Quarter 2010 Results

Sales for the three months ended September 30, 2010 increased by 66% to $7,290,685 as compared with $4,382,522 for products sold in the same period ended September 30, 2009.  This increase is primarily due to an increase in sales for our new products, Galanthamine Hydrobromide, Cow-bezoar Detoxicating tables, Ganhai Stomach Recovery capsules, Camptothecine, VC Honeysuckle-fructusforsythiae tables and compound Salvia Root tablets. Sales to new customers have also contributed to the increase in sales.

Gross profit increased 58% to $3,088,846 for the three months ended September 30, 2010, as compared to $1,956,019 for the three months ended September 30, 2009. Our gross profit margin fell 3% to 42% as of the three months ended September 30, 2010 from 45% as of the same period in 2009, mainly due to the increase in subcontracting charges.

In the three months ended September 30, 2010, selling, general and administrative expenses were $998,913, a decrease of 15%, as compared to $1,177,302 compared to the same period of 2009. The decrease for the 3 months ended September 30, 2010 was due primarily to decrease in amortization of intangible assets, advertising expenses and the reversal of a write-off related to an advance made to a supplier.

As a result of the above, in the three months ended September 30, 2010, Net Income increased to $2,191,362 as compared with the corresponding periods in 2009 of $918,266, representing a 139% year-over-year increase.

Nine months Results

In the nine months ended September 30, 2010, we achieved revenue of $20,018,100, an increase of 47% as compared with $13,575,614 for products sold in the same period ended September 30, 2009.  This increase is primarily due to the launch of new products and successful sales to new customers.  The Company's new products launched in 2010 were Galanthamine Hydromide, Hydroxycamptothecin, Tanshinone IIA, Cow-bezoar Detoxicating table, Ganhai Stomach Recovery capsule, Camptothecine, VC Honeysuckle-fructus Forsythiae table and compound Salvia Root. Increase in sales prices of the Company's major products, namely, Huanglong Cough & Dyspenca Capsules, Gynecological Inflammation Relieving Capsules, Hepatitis B Relieving and Curing Capsules and Sprain Relieving Plaster and successful market penetration into a new province, Jilin province, have also contributed to the increase in sales revenue.

Gross profit increased 36% to $8,262,544 for the nine months ended September 30, 2010, as compared to $6,072,254 for the nine months ended September 30, 2009. Our gross profit margin fell 4% to 41% as of the nine months ended September 30, 2010 from 45% as of the same period in 2009, mainly due to the increase in subcontracting charges and costs of raw and packing materials; effectively, the overall percentage increase in cost of sales offset an overall percentage increase in net sales

Selling, general and administrative expenses was $2,846,732 for the nine months ended September 30, 2010, an increase of 1% as compared to $2,814,031 for the same periods in 2009.

Net income achieved for nine months ended September 30, 2010 was $5,161,402, as compared with the corresponding periods in 2009 of $3,203,419, representing an increase of 61%.

Recent Events

On Sept. 16th, 2010, DK Sinopharma, Inc. successfully co-hosted the National Digestive & Cardiovascular Diseases Academic Conference along with China Pharmacology Academic Council and School of Medicine of Dalian University in Dalian. Many experts and scholars in digestive and cardiovascular systems attended the conference, including 92 doctors from large hospitals across the country.

On September 27, 2010, DK Sinopharma, Inc. successfully co-hosted the 2nd China Western Gynecological Diseases Research Forum along with China Physician Association Gynecology Branch and Shaanxi Pharmacology Academic Council. Many experts and scholars in gynecology attended the conference, including 146 gynecologists from large hospitals across China.

About DK Sinopharma, Inc.

DK Sinopharma, Inc. has its headquarters in Xi'an, Shaanxi Province, China. The Company identifies, discovers, develops, manufactures and distributes both prescription and over-the counter, including both conventional and Traditional Chinese Medicines, pharmaceutical products for the treatment of some of the most common ailments and diseases. Through the Company's operating entity, Yangling Dongke Maidisen Pharmaceutical Co. Ltd., the Company currently manufactures herbal extracts and 38 pharmaceutical products in the form of capsules, tablets, granules, semisolid ointment, powder, ointment, and paste ointment. We focus on varying diseases relating to respiratory system, digestive system, cardio-cerebral vascular system, antineoplastic, bone diseases-modifying antirheumatic, gynecological, and refill nutrition, among others. Yangling Dongke Maidisen Pharmaceutical Co. Ltd.'s manufacturing facilities are based in the City of Yangling in Shaanxi Province. Revenue was $20,018,100 and Net Income was $5,161,402 for the nine months ended September 30, 2010. Shareholders' Equity was $22,189,576 and Total Assets were $31,795,702 as at September 30, 2010. For more information see our website at http://www.dksinopharma.com.

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the company's ability to raise additional capital to finance the company's activities; the effectiveness, profitability, and the marketability of its products; legal and regulatory risks associated with the share exchange; the future trading of the common stock of the company; the ability of the company to operate as a public company; the period of time for which its current liquidity will enable the company to fund its operations; the company's ability to protect its proprietary information; general economic and business conditions; the volatility of the company's operating results and financial condition; the company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company's filings with the Securities and Exchange Commission and available on its website at http://www.sec.gov. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.