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Press release from CNW Group

China Health Labs & Diagnostics Ltd. completes installation of 587 total lab solutions in rural hospitals and clinics in Jilin Province, China

Monday, August 29, 2011

China Health Labs & Diagnostics Ltd. completes installation of 587 total lab solutions in rural hospitals and clinics in Jilin Province, China09:00 EDT Monday, August 29, 2011TSX-V: CHOOTCQX: CHLBFwww.chinahealthlabs.comTORONTO, Aug. 29, 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 587 BK Clinlabs, the Company's medical diagnostics total lab solution, 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 have been installed in existing rural hospitals to provide 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 ongoing service and maintenance to the Jilin BK Clinlabs as part of its medical diagnostics total lab solution.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 has 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."We are very pleased that we completed the Jilin installation ahead of schedule within the agreed six-month delivery timeframe.  We look forward to working with the rural hospitals in Jilin to support the BK Clinlab network to provide reliable medical diagnostics to the large rural population of Jilin," said Wilson Yao, CEO of China Health.  "The successful installation of the Jilin BK Clinlabs 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 growth of our BK Clinlab total solution is supported by the Chinese central government policy of improving rural healthcare, the value to rural hospitals of having reliable diagnosis capabilities to serve and retain patients for treatment, the desire of the rural population to have a local diagnostic service that can be trusted, and the business model that provides initial and ongoing revenues and profits to China Health."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 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.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 policies 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 INFORMATIONThis 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 in Jilin 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 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 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.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: bpedram@equicomgroup.com