China Pharma Holdings, Inc. Announces Third Quarter 2007 Results

HAIKOU, Hainan, China, Nov. 15 /Xinhua-PRNewswire-FirstCall/ -- China Pharma Holdings, Inc. ("China Pharma") (OTC Bulletin Board: CPHI), a specialty bio-pharmaceutical company that develops, manufactures and markets Western and Chinese medicines, today announced its financial results for the third quarter 2007 ended September 30, 2007.

Third Quarter 2007 Highlights

-- Revenue increased 65.36% yoy, to $8.3 million

-- Net income was $3.08 million, up 80.73% yoy

-- This year’s newly launched products got favorable sales achievements.

Sales of Granisetron hydrochloride has increased by $0.779 million yoy,

and Alginic Sodium Diester has increased by $0.58 million yoy.

-- EPS was $0.08, up 68.57% yoy

First nine months 2007 Highlights

-- Revenue increased 75.62% yoy, to $24 million

-- Net income was $8.78 million, up 71.96% yoy

-- This year’s newly launched products were well accepted by the market,

and our matured products continued their prevalent sales growth as well

-- EPS was $0.24, up 61.66% yoy

China Pharma’s revenue in the third quarter of 2007 was $8.3 million, up 65.36% compared to $5.01 million in the third quarter of 2006. Andrographolide has increased by 135.07% yoy, Cefaclor has increased by 99.63% yoy, Neurotrophicpetide increased by 72.58% yoy, Buflomedil has increased by 64.12% yoy. Newly launched Granisetron hydrochloride has increased by $0.779 million, and Alginic Sodium Diester has increased by $0.58 million. Gross profit increased 55.59% to $3.88 million from $2.49 million in the third quarter of 2006. The growth of gross profit benefits from the high growth of revenue. Net income was $3.08 million, up 80.73% as compared to the same period a year ago. Fully diluted earnings per share were $0.08, a 68.57% increase from the third quarter of 2006.

"We are pleased to deliver outstanding revenue and net income for the third quarter 2007. Our input to the marketing got good rewards. The company performed well both in terms of financial performance and execution of our key business strategies. Our increased market penetration for our existing portfolio and the wide acceptance of our newly launched products Granisetron hydrochloride and Alginic Sodium Diester have contributed to the strong growth of our revenue," commented Ms. Zhilin Li, President and CEO of China Pharma, "Our strong performance is the result of building an extensive and diversified portfolio of therapeutics which allows us not to depend on any one product for revenue growth.

Selling expenses were 422,098 US dollars for the quarter; it represents 55.78% of the total operating expenses. During this year, to broaden our market share further, a lot of money has been spent on the marketing of our products, 70 new salespersons have been recruited, in line with this, traveling expenses, office expenses and salaries have been increased.

General and administrative expenses incurred this quarter are $329 thousands; it stands for around 43% of the total operating expenses, while the corresponding G&A last year was $100 thousand, which stands for around 23.7% of the total operating expenses. This was mainly caused by a large sum of expenses spent in the design of new packaging style (amounting to $94 thousand), and because the carrying amount of the intangible assets has increased, the amortization expenses of intangible asset have also increased (by around $34 thousand), and as a result of the increased sales volume, traveling fees and office expenses have increased significantly as well.

Income from operations has increased to $3.12 million, up 50.69% yoy. This is a combined result of the 55.59% increase in gross profit.

As of September 30, 2007, China Pharma had $1.71 million in cash and cash equivalents, which was approximately eight folds on September 30, 2006. Total liabilities were $8.23 million and working capital was $29.98 million. Days Sales Outstanding was 166. And shareholders’ equity stood at $34.65 million.

Business Outlook

China Pharma has solid research and development cooperation with leading institutions in China, and has developed a diversified portfolio of therapeutics with strong potential. Its marketing channels are under continuous expansion and the size of its sales force is ever growing. Therefore, the Company’s revenue can be expected to grow continuously. And the China State Food and Drug Administration (SFDA) implemented a new regulation for registering new drugs on October 1st, 2007, which is expected to quickly resume normal procedures at SFDA for approving new drugs.

The rectification indeed brought transitory negative impact to the Chinese pharmaceutical industry, but we strongly believe that our R&D, manufacture, and marketing are full of opportunities.

The Seventeenth National Congress of the Communist Party of China has confirmed the basic policies of the health care reform. The government has committed to expand its rural cooperative medical system (CMS) to cover more rural areas in the country, and will spend $1.3 billion in this program on an annual basis. CMS is currently covering about 51% rural areas, and by 2010, the whole country will be covered by this program. China Pharma expects to greatly benefit from the CMS program.

Conference Call

China Pharma will host a conference call on Thursday November 15 at 11:00 am EST to discuss third quarter 2007 results. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (800) 706-7749 International callers should dial (617) 614-3474. The conference pass code is 82975823.

If you are unable to participate in the call at this time, a replay will be available on Thursday, November 15, at 1:00 pm EST, through Thursday, November 22, at 1:00 pm EST. To access the replay, dial (888) 286-8010. International callers should dial (617) 801-6888. The conference pass code is 41438898.

The conference will be broadcast live over the Internet and can be accessed by all interested parties at China Pharma’s website at http://www.chinapharmaholdings.com . To listen to the call please go to the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

About China Pharma Holdings, Inc.

China Pharma Holdings, Inc. develops, manufactures, and markets generic and brand bio-pharmaceutical products in China that treat a wide range of conditions, including infections, hepatitis, vascular, CNS and other prevailing diseases. Helpson Bio-pharmaceutical Co., Ltd (Helpson), a specialty pharmaceutical company headquartered in Haikou City, Hainan province in China, is a wholly owned subsidiary of China Pharma Holdings. For more information on the Company please go to http://www.chinapharmaholdings.com .

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release and oral statements made by China Pharma on its conference call in relation to this release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand, increased competition, failure to obtain or maintain intellectual property protection, downturns in the Chinese economy, uncompetitive levels of research and development, failure to obtain regulatory approvals, and other information detailed from time to time in the Company’s filings and future filings with the United States Securities and Exchange Commission. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

Item 1 Financial Statements (Unaudited)

CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

September 30, December 31,

2007 2006

ASSETS

Current Assets:

Cash and cash equivalents $1,715,650 $656,441

Trade accounts receivable, less

allowance for doubtful

accounts of $2,554,705 and

$1,562,494, respectively 17,118,699 12,101,979

Other receivables, less allowance for

doubtful accounts of $54,910

and $27,517, respectively 726,200 355,554

Deferred offering costs -- 59,390

Advances to suppliers 4,903,250 2,255,877

Inventory 13,716,136 10,277,887

Total Current Assets 38,179,935 25,707,128

Non-current Assets:

Property and equipment, net of

accumulated depreciation of

$935,328 and $619,649, respectively 2,621,864 2,725,173

Intangible assets, net of accumulated

amortization of $229,433 and

$135,656, respectively 2,065,264 65,344

Deferred tax assets 17,403 16,736

Total Non-current Assets 4,704,531 2,807,253

TOTAL ASSETS $42,884,466 $28,514,381

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:

Trade accounts payable $781,630 $477,291

Accrued expenses 193,154 104,216

Accrued taxes payable 175,084 167,419

Other payables 56,407 185,096

Advances from customers 195,977 141,871

Accounts payable -related parties -- 22,650

Short-term notes payable 6,794,296 6,533,649

Total Current Liabilities 8,196,548 7,632,192

Research and development commitments 33,255 31,980

Total Liabilities 8,229,803 7,664,172

Stockholders’ Equity:

Common stock, $0.001 par value,

60,000,000 shares

authorized, 37,228,938 and 34,723,056

shares issued and outstanding,

respectively 37,229 34,723

Additional paid-in capital 11,559,656 7,764,979

Foreign currency translation

adjustment 1,886,200 663,871

Retained earnings 21,171,578 12,386,636

Total Stockholders’ Equity 34,654,663 20,850,209

TOTAL LIABILITIES AND STOCKHOLDERS’

EQUITY $42,884,466 $28,514,381

CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

For the three months For the nine months

ended September 30, ended September 30,

2007 2006 2007 2006

Revenue $8,293,497 $5,015,272 $24,097,521 $13,721,587

Cost of revenue 4,413,042 2,521,205 13,018,566 7,151,898

Gross profit 3,880,445 2,494,067 11,078,955 6,569,689

Operating expenses:

Selling expenses 422,098 42,966 896,128 213,350

General and

administrative 328,743 100,650 1,912,266 333,654

Research and

development 5,941 125,359 846,822 124,715

2007 Bad debt expense

(recovery) -- 152,142 -- (28,349)

Total operating

expenses 756,782 421,117 3,655,216 643,370

Income from operations 3,123,673 2,072,950 7,423,739 5,926,319

Non-operating income

(expenses):

Interest income 4,400 408 29,808 588

Interest expense (50,857) (39,872) (166,698) (87,690)

Other income 7,549 -- 1,498,093 --

Total non-operating

income (expense) (38,908) (39,464) 1,361,203 (87,102)

Income before taxes 3,084,765 2,033,486 8,784,942 5,839,217

Income tax expense -- (326,661) -- (730,560)

Net income $3,084,765 $1,706,825 $8,784,942 $5,108,657

Comprehensive income -

foreign currency

translation

adjustments 570,646 25,307 1,222,329 137,964

Comprehensive income 3,655,411 $1,732,132 $10,007,271 $5,246,621

Basic and diluted

earnings per common

share $0.08 $0.05 $0.24 $0.15

Weighted-average common

shares outstanding 37,228,938 34,723,056 36,935,208 34,723,056

CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the nine For the nine

months ended months ended

September 30, September 30,

2007 2006

Cash Flows from Operating Activities:

Net income $8,784,942 $5,108,657

Depreciation and amortization 322,098 288,142

Changes in assets and liabilities:

Trade accounts receivable (4,440,513) (5,405,382)

Other receivables (349,117) (99,868)

Advances to suppliers (2,504,684) 152,181

Inventory (2,965,836) (2,618,835)

Deferred tax assets -- 8,029

Deferred offering costs 60,487 --

Trade accounts payable 279,420 354,002

Accrued expenses 83,034 11,071

Accrued taxes payable -- (197,707)

Other payables (134,647) 144,450

Advances from customers 47,448 31,586

Net Cash Used in Operating Activities (817,368) (2,223,674)

Cash Flows from Investing Activities:

Purchase of property and equipment (77,313) (169,508)

Purchase of intangible assets (1,993,288) --

Net Cash (Used) by Investing

Activities (2,070,601) (169,508)

Cash Flows from Financing Activities:

Proceeds from sale of common stock

and warrants 3,797,183 --

Proceeds from short term notes

payable -- 2,120,150

Net Cash Proceeds from Financing

Activities 3,797,183 2,120,150

Effect of Exchange Rate Changes on

Cash 149,995 5,199

Net Change in Cash 1,059,209 (267,833)

Cash and Cash Equivalents at

Beginning of Period 656,441 461,220

Cash and Cash Equivalents at End of

Period $1,715,650 $193,387

For more information, please contact:

Sophia Yu

China Pharma Holdings, Inc.

Tel: +86-898-6681-1730

Email: hps@chinapharmaholdings.com