China Health Labs & Diagnostics Ltd. provides update on operating performance in 2011

TSX-V: CHO
OTCQX: CHLBF

www.chinahealthlabs.com

TORONTO, Feb. 21, 2012 /CNW/ - China Health Labs & Diagnostics Ltd. ("China Health" or the "Company") (TSXV:CHO; OTCQX:CHLBF), is pleased to announce that it made progress in its mission of becoming a leading provider of total solutions for medical diagnostics and food safety testing in China and achieved its operational goals for the three months and year ended December 31, 2011. Highlights include the following:

• Completed installation of 623 BK Clinlab total lab solutions in rural hospitals in China, including 36 in the fourth quarter.  Installed base of BK Clinlabs increased to 833 in five provinces of China by the end of 2011, compared to 210 labs in three provinces of China at the start of 2011 (see press release dated December 13, 2011 for previous disclosure);
• Delivered 67 point of care technology ("POCT") diagnostic solutions to four customers, including 30 delivered in the fourth quarter of 2011, compared with 35 POCT diagnostic solutions to one customer delivered in the full year of 2010 (see press release dated November 10, 2011 for previous disclosure);
• Delivered on a $10.1 million (RMB 61.5 million) sales order for food safety total lab solutions to the Beijing municipal government in the fourth quarter of 2011, compared to $5.5 million delivered in the full year of 2010 (see press release dated November 28, 2011 for previous disclosure);
• Strong growth of revenue and profits expected for the year ended December 31, 2011 driven by growth in the three areas where the Company provides total lab solutions, rather than selling individual products.

As previously reported, revenue grew by 42% to $25.626 million and profit grew by 66% to $4.228 million for the nine months ended September 30, 2011 compared to the same period last year.  Revenue and profit results for the fourth quarter and year ended December 31, 2011 will be reported when the Company's audited financial statements have been completed and approved, expected before the end of April 2012.  The Company expects that in 2011, revenue seasonality will be similar to previous years with the first quarter revenues being the smallest due to the budgeting process of the Company's customers and Chinese New Year holidays, and the fourth quarter revenues expected to be the largest due to deliveries of products and services that have been ordered during the year.  Revenues for the nine months ended September 30, 2010 accounted for approximately 54% of total revenues of $33.705 million for the year ended December 31, 2010.

"Our team in China achieved the Company's operational goals for 2011, growing our sales and customer base in our total lab solutions business, improving our technology, and expanding our product lines", said Wilson Yao, CEO of China Health.  "We will continue to work with our customers to develop and implement diagnostic solutions, improve our lab management system and provide ongoing supplies of testing reagents and service.  We believe that the future growth of the Company will be driven by revenues and profits from the proprietary solutions we have developed."

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 that are supported by Chinese government policy and budgets: BK Clinlab total lab solutions for rural hospitals and clinics, POCT 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

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 the reporting of the Company's financial results for the fourth quarter and year ended December 31, 2011, the Company's revenue seasonality, the future growth of the Company being driven by revenues and profits from proprietary solutions, and the expansion of the Company's business through its sales network in areas where it has proprietary products, limited competition and strong government support.  The forward-looking information is based on certain assumptions, which could change materially in the future, including the assumption that the Company will be able to report its financial results as expected, that the Company's revenue seasonality will continue to be similar to previous years, that the Company's deliveries on sales orders will result in revenues, that revenues and profits from the Company's proprietary total lab solutions will drive the Company's growth, and that the Company will be able to expand its sales network and business.  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 risk that the Company may not be able to report on its fourth quarter and year-end financial results as expected, the Company's revenue seasonality may differ from previous years, customers may not make payment on a timely basis or at all on the Company's deliveries, the revenues and profits from the total lab solutions may not drive the Company's growth if any, and the Company may not be able to expand its business as expected through its sales network in any of the areas in which it has proprietary products, limited competition and strong government support.  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 deliveries on sales orders, 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.

Judyanna Chen
Chief Financial Officer
China Health Labs & Diagnostics Ltd.
T: [phone]
Email: [email protected]

Babak Pedram
Investor Relations
TMX Equicom Group
T: [phone] ext. 264
Email: [email protected]