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Press release from CNW Group


Tuesday, July 26, 2011

CHINA HEALTH LABS & DIAGNOSTICS LTD. COMPLETES INSTALLATION OF FIRST 415 TOTAL LAB SOLUTIONS IN RURAL HOSPITALS AND CLINICS IN JILIN PROVINCE, CHINA08:30 EDT Tuesday, July 26, 2011TSX-V: CHOOTCQX: CHLBFwww.chinahealthlabs.comTORONTO, July 26, 2011 /CNW/ - China Health Labs & Diagnostics Ltd. ("China Health" or the "Company") (TSXV:CHO; OTCQX:CHLBF), is pleased to announce that it has completed installation of 415 BK Clinlabs, pursuant to the Company's contract with Jilin Province to install a total of 587 BK Clinlabs, as previously announced by the Company in a press release dated April 18, 2011.  Jilin Province is located in Northeast China with a population of approximately 25 million.  The BK Clinlabs are being installed in existing rural hospitals with the goal of providing basic diagnostic testing services for the rural communities of Jilin Province.The installation of the 587 BK Clinlabs in Jilin is expected to generate initial revenue of approximately RMB 41 million ($6.2 million) in 2011.  In addition, the Company is negotiating an agreement to provide on going service and maintenance to the Jilin BK Clinlabs as part of its medical diagnostics total lab solution.On July13-15, China Health hosted a tour of the of the BK Clinlabs installed in Changchun county, Jilin Province attended by Mr. Sun, Zhigang, the Vice Chairman of National Reform and Development Commission and Head of the Medical Reform Office of the State Department (which is responsible for the healthcare planning and budgeting at the China national level), Mr. Ma Junqing, the Vice Governor of Jilin Province, and Mr. Sui Dianjun, the Head of Jilin Department of Health.  The purpose of the tour was to monitor the progress of the Jilin installation and assess the BK Clinlab total solution for application in other provinces of China."The Jilin installation is progressing ahead of schedule and is expected to be completed within the agreed six-month delivery timeframe. The Jilin project is an important milestone for our company.  When completed, it will be a showcase for our ability to install a large network of diagnostic labs, to train hospital staff to operate them efficiently and to provide an ongoing supply of testing reagents, service and other lab consumables.  We believe that the July tour by the provincial and national government officials was a success and look forward to further cooperation with the Chinese government to help improve rural healthcare," said Wilson Yao, CEO of China Health. "In fact, the Jilin BK Clinlab network is expected to provide reliable medical diagnostics to the large rural population of Jilin, a major priority in the Chinese government healthcare policy and budget.  We have been working hard to introduce the BK Clinlab solution to other provinces in China and believe that the success of the Jilin installation will be monitored very closely by the key decision makers."The BK Clinlab was developed by China Health as a total lab solution comprising diagnostic equipment, hardware and software, installation and training and an ongoing supply of reagents and service for use in rural hospitals and clinics.  The Company believes that this approach provides added value to the rural hospitals and builds strong customer loyalty compared with selling individual products.  The BK Clinlab total lab solution includes basic in-vitro diagnostic testing equipment (and complementary reagents) such as haematology analyzers, coagulation analyzers, urine analyzers, biochemistry analyzers, and electrolyte analyzers, which are mostly produced at the Company's Beijing manufacturing plant.  China Health has developed and patented the Lab Management System ("LMS"), a proprietary computer hardware and software system that connects the diagnostic equipment facilitating ease of operation, quality control, management of patient information and monitoring of reagent inventory.  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 more than 50,000 rural hospitals throughout China.In 2010, China Health had revenues of approximately $33.7 million, of which approximately $3 million was generated from sales of the BK Clinlab total lab solution.  Accordingly, with the Jilin agreement, China Health expects revenues from rural hospitals and clinics to grow by more than 100% in 2011, compared to 2010. After the completion of the Jilin installations, China Health is expected to have installed its BK Clinlab in 797 rural hospitals and clinics in four provinces of China (Jilin, Henan, Guizhou and Liaoning), compared to 210 locations at the end of 2010. To date, China Health has installed its BK Clinlab solution in 625 rural hospitals, including 124 of them installed in the fourth quarter of 2010 pursuant to agreements previously announced in the Company's press release dated November 18, 2010.China Health 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 which 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-IFRS MEASURESThis 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 installed or to be installed in Jilin, the installation schedule for the balance of the BK Clinlabs to be installed in 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 the Company will have the capacity to produce and install the balance of the BK Clinlabs in Jilin, the installation of the balance 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, 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 generate the expected revenue from its BK Clinlabs installed in Jilin, the balance of 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 contract, which is a non-IFRS measure.  Readers are cautioned that such a measure is not recognized under Canadian IFRS 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: Babak Pedram Investor Relations TMX Equicom Group
 T: (416) 815-0700 ext. 264 Email: