Luoxin Announces 2011 Interim Results -- Profit Attributable to Shareholders Surges 20.2% to Approximately RMB 230,879,000

Continues Market Expansion

Strengthens the Building of an All-rounded Sales Network

Unaudited financial summary

HONG KONG, Aug. 10, 2011 /PRNewswire-Asia/ -- Shandong Luoxin Pharmacy Stock Co., Ltd. ("Luoxin" or the "Company", stock code: 8058), a leading PRC pharmaceutical enterprise, today announced its unaudited interim results for the six months ended 30 June 2011 (the "period under review").

During the period under review, the Company continued to strengthen its R&D, production and distribution capabilities, thereby maintaining a good operating condition. The Company's turnover increased by 30.4% year-on-year to approximately RMB780,772,000. Gross profit rose by 50.4% to approximately RMB473,808,000, with gross profit margin increased by 8.1% points to 60.7%. The Company’s profit attributable to shareholders surged by 20.2% to approximately RMB230,879,000. Weighted average earnings per share were RMB37.87 cents, representing an increase of 20.2% over the corresponding period in 2010. The board of directors of the Company does not recommend payment of an interim dividend for the six months ended 30 June 2011.

Mr. Liu Baoqi, Chairman of Luoxin, said, "The Company always insists on the strategic core competencies of enhancing its science and technology innovation, accelerating its capabilities in research and development and distribution, and consolidating its production. Best endeavours were used in the provision of reliable, high-technology and high value added pharmaceutical products. During the period under review, the Company fully leveraged on the opportunities arising from the expansion in the market and fulfilled market demand by investing additional resources in enhancing production capabilities and technologies and accelerating the research and development of new products. At the same time, the Company has been keen on tapping into a broader market in order to increase its market share. This in turn will allow satisfactory growth in both turnover and earnings, building a solid foundation for its sustainable development in future. During the period under review, Luoxin successfully became China's first producer of cefazedone sodium and cefazedone sodium for injection. Besides, the product Ambroxol Hydrochloride was included as the National New Key Drug Formulation Grand Science and Technology Project of the 12th Five-Year Plan. Moreover, our lansoprazole for injection has been granted an invention patent by the State Intellectual Property Office."

As at 30 June 2011, the Company's cash on hand and cash equivalents amounted to approximately RMB794,548,000. The strong cash position is favourable for the future development of the Company.

Prior to the period under review, the Group has been recognised as an "Industrial Model Enterprise in the National Integrated Platform for New Pharmaceutical Research, Development and Technology (Shandong)" and "Key High-Tech Enterprise under the State Torch Program". The Group has also established the "Post-Doctoral Research Workshop of the State". On such basis, during the period under review, the Company was allowed to establish "Shandong Key Lyophilized Powder Injection Pharmaceutical Laboratory", "Shandong Key Lyophilized Powder Injection Pharmaceutical Engineering Laboratory" and the position of "Taishan Scholar–Pharmaceutical expert consultant", so as to introduce talents and build a stronger platform for research and development and technology improvement for the Group, which will further strengthen the research and development competencies of the Group and enhance its overall competitiveness. At the same time, the Group has also received 15 patents of invention in the PRC. It is now applying for 12 patents of invention in the PRC. Five new drugs were approved for production and registration. As of 30 June 2011, the Group had 48 patents, of which 38 were national patents.

Meanwhile, Luoxin's progress on the construction of production facilities is also on schedule. The construction of infusion workshop and ancillary facilities of Shandong Yuxin Pharmacy Co., Ltd. has completed, and is expected to generate revenue next year. Besides, the construction of pharmaceutical raw materials project of Shandong Hengxin Pharmacy Co., Ltd. is underway. The first phase of the project is scheduled to be completed and ready for operation at the end of the year.

Chairman Liu Baoqi concluded, "The 'Twelfth Five-Year Plan' policies of accelerating medical reform and adjusting the structure of pharmaceutical industry helped to drive the long-term healthy development of the whole pharmaceutical industry. Looking forward, the Company will be keen on tapping into a broader market in order to increase its market share. This in turn will allow satisfactory growth in both turnover and earnings, laying a solid foundation for our sustainable development in future."

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About Shandong Luoxin Pharmacy Stock Co., Ltd.

Luoxin has been listed on the GEM of the Stock Exchange of Hong Kong Limited since 9 December 2005. The Company was recognized as one of the "Top Ten Pharmaceutical Enterprises with Growth Potential" and named as one of the "Top 100 Pharmaceutical Companies in China" since 2006. It was also selected on the "List of Small and Medium-sized Enterprises in China with Most Potentials" by Forbes for three consecutive years. The Company is principally engaged in the development, manufacturing and sale of different types of prescription and OTC (over-the-counter) medicines in 4 major categories: (1) system-specific medicines, including digestive system medicines, cardiovascular system medicines and respiratory system medicines; (2) anti-viral medicines; (3) antibiotics, including Cephalosporines antibiotics, Quinolones antibiotics and Macrolides antibiotics; (4) other chemical medicines, including Antineoplastic medicines. The Company's production facilities are located in the High and New Technology Experimental Zone, Linyi, Shandong Province, the PRC, and has obtained all required production permits as well as GMP certification. Its sales and marketing networks cover 27 provinces and 4 municipalities in the PRC.