China Health Labs & Diagnostics Ltd. provides update on rural lab installations

TSX-V: CHO
OTCQX: CHLBF

www.chinahealthlabs.com

TORONTO, March 15, 2012 /CNW/ - China Health Labs & Diagnostics Ltd. ("China Health" or the "Company") (TSXV:CHO; OTCQX:CHLBF), is pleased to announce that it now has 906 BK Clinlabs installed or contracted for installation in eight provinces of China.  In addition, it has delivered 63 Rural Mobile Labs to the Health Care Bureau in Xinjiang Uygur Autonomous Region. As previously announced, China Health increased its installed base of BK Clinlabs to 833 in five provinces of China at the end of 2011, compared to 210 labs in three provinces at the start of 2011 (see press release dated February 21, 2012).  The additional 73 BK Clinlabs and 63 Rural Mobile Labs are expected to be delivered in the first and second quarters of 2012.

The Rural Mobile Labs are a new product developed to serve sparsely populated remote rural areas that do not have local hospitals.  China Health worked with the customer, the Health Care Bureau in Xinjiang Uygur Autonomous Region, to develop a solution that integrates its lab diagnostic equipment, point of care technology and lab management system (LMS) into a vehicle equipped with an extensible treatment space.  The Company expects to generate approximately RMB 11.8 million ($1.9 million) from the sale.  The vehicles were provided by a separate supplier.

Included in the 906 BK Clinlabs are 44 that are being installed in Chongqing, China, 16 of which were installed in the fourth quarter of 2011.  The Chongqing labs are being installed under a new business model, whereby the Company will install the labs in return for a five-year contract to provide testing reagents and maintenance services that is expected to generate revenues of RMB 17.7 million ($2.8 million).

Also included in the 906 BK Clinlabs are a total of 45 labs for customers in Hebei Province, Qinghai Province and Xinjiang Uygur Autonomous Region, with installations expected to be completed before the end of the second quarter of fiscal year 2012.

The Company is also pleased to report that Biosino Bio-Technology and Science Inc. has been allocated five provinces in China (Sichuan, Jiangxi, Anhui, Shanxi and Shandong) to lead marketing of the BK Clinlab rural hospital total diagnostic lab solution, pursuant to the agreement signed in 2011.  (See press release dated November 7, 2011.)

"Our track record of delivering a total diagnostic solution to rural hospitals in China has been the key to expanding our installed base to over 900 locations in eight provinces of China, compared to 86 locations in two provinces when we listed on the TSXV in October of 2010," said Wilson Yao, CEO of China Health.  "Our diagnostic laboratory equipment, lab design and installation, proprietary LMS, training and ongoing service is providing rural hospitals with the ability to diagnose and treat patients and helping the Chinese government achieve its goal of providing improved health care to the rural population.  Our team did a great job using our technology and knowledge of customer needs to develop the Rural Mobile Labs, a great solution for remote areas without access to hospitals.  We plan to expand our installed base in the eight provinces where we have locations, and add new provinces in 2012."

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 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 the installations to be delivered and revenues to be generated from the installations, reagents and maintenance services, the completion of the installations by the second quarter of fiscal year 2012, the expansion of the Company's installed base in the eight provinces and expansion to new provinces in 2012 and the growth 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 deliver the new installations, that the new installations will be completed by the second quarter of fiscal year 2012, that payment for the installations, reagents and maintenance services will be made and revenue recognized, that the Company will have the resources and ability to expand its installed base and expand to new provinces and that the Company will be able to grow 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 deliver the outstanding installations as scheduled or at all, the Company may not be able to generate the expected revenue from its installations, reagents and maintenance services as expected, the customers may not make payment on a timely basis or at all upon installation, the Company may not have the ability or resources to expand its installed base in the eight provinces and to new provinces, and the Company may not be able to grow 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 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]