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Press release from CNW Group

China Health Labs & Diagnostics Ltd. announces $10.1 million sales order for its food safety business

Monday, November 28, 2011

China Health Labs & Diagnostics Ltd. announces $10.1 million sales order for its food safety business09:00 EST Monday, November 28, 2011TSX-V: CHOOTCQX: CHLBFTORONTO, Nov. 28, 2011 /CNW/ - China Health Labs & Diagnostics Ltd. ("China Health" or the "Company") (CHO: TSXV), is pleased to announce that it has secured a sales order of RMB 61.5 million ($10.1 million) for food safety testing equipment, lab management system ("LMS") software and hardware, and installation services from the Beijing municipal government, through a bidding agent, Oriental Scientific Instruments Import and Export Corporation.  The sales order is for delivery in 2011, and includes a LMS software developed by the Company to connect all the Beijing food safety labs, enabling more efficient communications and operations.This sales order represents growth of 100% for the food safety business compared to 2010, when the Company had revenues of $33.7 million of which 15% or $5.5 million was from the food safety business."Improving food safety is a high priority for the Chinese government at the central and municipal levels. The Chinese government established the State Council Food Safety Commission last year and this year, the SCFSC announced a five-year program for food safety education," said Wilson Yao, CEO of China Health.  "We have used our expertise in lab management and design to assist the Beijing municipal government to establish an effective network of food testing labs that operate with our proprietary lab management system.  In the future, we plan to use our track record in Beijing as a reference to expand our food safety sales to other cities in China."In 2008, China Health entered the food safety market by installing food-testing labs mandated and paid for by the Beijing municipal government in response to concerns due to the growing number of high profile food safety incidents and the need to improve safety for the Beijing Olympics.  In 2009 and 2010, the Company developed and provided food safety lab solutions, including the Company's proprietary LMS software, for major food distribution centres in Beijing and a mobile lab solution based on the need for on-site rapid testing, which generated increasing revenues in each year.  Currently, the Company's food safety lab solutions test for, among other things: (1) heavy metal residue, such as mercury, cadmium and lead; (2) pesticide residue, such as alpha-BHC, formothion, oryzalin, pyraflufen-ethyl, DDT and nitenpyram; (3) veterinary drug residue, such as ampicillin, amoxicillin, altrenogest and bacitracin; (4) pathogenic micro-organisms, such as salmonella, shigella, vibrio parahaemolyticus and clostridium botulinum; and (5) poisonous food additives, such as lean meat powder, melamine, plasticizer and malachite green. The food safety lab solutions include equipment assembled at the Company's Beijing manufacturing facility and sourced from other manufacturers. To date, China Health has installed 17 major labs, 250 mini-labs (in food distribution and manufacturing facilities) and supplied 17 mobile labs to the Beijing municipal government to improve food safety.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 which are supported by Chinese government policies and budgets: BK Clinlab total lab solutions for rural hospitals and clinics, food safety 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 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 sales of food safety products, the delivery schedule of food safety products, and the revenue and profit growth of food safety products.  The forward-looking information is based on certain assumptions, which could change materially in the future, including the assumption that the orders for food safety products will result in sales, payment and revenue recognition, the delivery of food safety products will be on schedule, and food safety products will be key drivers of the Company's revenue and profit growth.  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 food safety product orders from may not result in sales, the Company may not be able to deliver the food safety products on schedule, and the Company's food safety products may not contribute to revenue and profit growth as expected.  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 orders received, 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: Judyanna Chen Chief Financial Officer China Health Labs & Diagnostics Ltd. T: (416) 865-3351 Email: jchen@chinahealthlabs.com Babak Pedram Investor Relations TMX Equicom T: (416) 815-0700 ext. 264 Email: bpedram@equicomgroup.com