China Biologic Products Announces Strong First Quarter 20...(ed at $5.3 million to be sold under Shan...)

Business Outlook

On July 1, 2008, the SFDA implemented a new 90-day quarantine period on plasma raw material. This new measure further tightens the raw material that is available for production, and has adversely impacted the already short supply of plasma-based products. As a result, during the first quarter of 2009, the supply of plasma-based products remained very tight industry-wide. The continuing price increase of the Company's products since 2008 was primarily attributable to the government's stringent control on the quality standard of the plasma-based production industry, which resulted in a shortage in the supply of finished products. The Company has been able to adjust its production plan to take advantage of the limited market supply of plasma resources to realize higher profit margins. In addition, there is a shortage in the market supply for human albumin products which has increased the value of the Company's products in the market place.

The plasma-based industry has been immune from the impact of the ongoing global financial crisis as the demand for the Company's products has outpaced supply. As a result, the Company's selling price, cost of revenue and operating expenses during the first quarter of 2009 were not impacted by the global financial turmoil. With the acquisitions of Huitian and Dalin, and its operating subsidiary Qianfeng, the Company is better situated to serve its existing and new customers with expanded production capacity and market coverage. Management expects that revenue growth will remain strong for the remainder of 2009.

Assuming the full year consolidation of Dalin, management estimates revenues for 2009 will be in the range of $90 million to $100 million with net income between $18 million to $22 million, including the equity investment income from the 35% acquisition of Hut
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