CHINA HEALTH LABS & DIAGNOSTICS LTD. SECURES BID TO INSTALL ITS TOTAL LAB
SOLUTION IN 587 RURAL HOSPITALS AND CLINICS IN JILIN PROVINCE, CHINA

VANCOUVER, Dec. 29 /CNW/ - China Health Labs & Diagnostics Ltd. ("China Health" or the "Company") (CHO: TSXV), is pleased to announce that it has secured a bid to install its total diagnostic lab solution, the BK Clinlab, in 587 rural hospitals in Jilin Province, China. A definitive agreement setting out the final terms and conditions of the installation and support packages is expected to be completed in January 2011.

The installations are expected to start in January 2011 and be mostly completed by the end of July 2011.  After the completion of the installation, China Health will have installed its BK Clinlab in 797 rural hospitals and clinics in four provinces of China (Jilin, Henan, Guizhou and Liaoning), of which, China Health has installed its BK Clinlab solution in 210 rural hospitals, including 124 installed in the fourth quarter of 2010, pursuant to agreements previously announced in the Company's press release dated November 18, 2010.

"Winning the Jilin bid is a key step in achieving our goal of using our proprietary total diagnostic lab solution to establish a leading market share for medical diagnostic products and services in the underserved rural market in China," said Wilson Yao, CEO of China Health. "We look forward to the opportunity to deliver reliable diagnostic services to the rural communities of Jilin, while delivering strong revenue and profit growth to our shareholders."

The BK Clinlab was developed by China Health as a suite of standard diagnostic equipments and reagents, hardware and software, for use in rural labs and supported by China Health's service network.  The BK Clinlab total lab solution includes basic in-vitro diagnostic testing equipments (and complementary reagents) such as hematology analyzers, coagulation analyzers, urine analyzers, biochemistry analyzers, and electrolyte analyzers.  China Health has developed proprietary computer hardware and software that connects the diagnostic equipments and assists with analysis, allowing rural labs to conduct basic diagnostic tests without having patients travel long distances.  As part of the BK Clinlab, a network of service centres staffed with trained technicians has and is being set up to provide support to rural labs within the service area and to provide a dependable source of reagents.  As rural diagnostic facilities in China are typically underserviced and often lack even basic diagnostic capabilities, China Health believes that it is uniquely positioned to capitalize on this opportunity, as they are the first company in China to identify and create a medical laboratory solution specifically tailored to service the approximately 50,000 rural hospitals throughout China.  In addition, in 2009 the Chinese government announced plans to spend RMB 850 billion (approximately CAD$130 billion) to improve health care over a three year period, including the construction of almost 40,000 new rural hospitals and clinics.

China Health intends to expand its business by focusing its efforts on expanding its sales network to three areas where it has proprietary products, limited competition and strong government support: rural diagnostic medical facilities in China, military and emergency services, and food testing applications. 

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 revenue generation from the Company's BK Clinlabs to be installed in Jilin and from sales of the Company's reagents and its service and maintenance packages, the installation schedule for the BK Clinlabs to be installed in Jilin rural labs and clinics, a definitive agreement for the BK Clinlabs for Jilin rural labs and clinics, 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 a binding agreement will be entered into for the BK Clinlabs to be installed in Jilin, the Company will have the capacity for the additional BK Clinlabs, the installation of the BK Clinlabs will be on schedule, payments for the BK Clinlabs will be made within a reasonable period of time and revenue recognized, additional revenue will be from sales of BK Clinlabs and reagents, and 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 risks that the Company may not be able to enter into or complete a definitive agreement, the Company may not be able to generate the expected revenue from its BK Clinlabs installed in Jilin or from sales of the Company's reagents and its service and maintenance packages, the BK Clinlabs may not be installed according to the expected schedule or at all, and the Company may not 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 a secured bid, 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.

For further information:

Kim Oishi
Director
Telephone: [phone]
Email: [email protected]