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Yongye Biotechnology Announces Preliminary Results for Fiscal Year 2008

BEIJING, Feb. 16 /PRNewswire-Asia-FirstCall/ -- Yongye Biotechnology International, Inc. (OTC Bulletin Board: YGYB; "Yongye" or the "Company"), a leading producer and distributor of plant and animal nutrient products located in the People's Republic of China, today announced preliminary financial results for its fiscal year ended December 31, 2008.

Based upon preliminary financial data that have not yet been reviewed by its independent auditors, Yongye expects net revenue for its fiscal year 2008 to be between $45 million and $47 million, up from $13.1 million in fiscal year 2007, with product sales of over 500,000 units of both plant and animal product. The Company had remarkable revenue growth primarily because of the rapid expansion of Yongye's sales network of branded stores. In 2008, Yongye added an additional 575 independently owned agricultural product stores to its branded store network in its existing markets, bringing its total number of stores from 200 at the end of 2007 to 775 at the end of 2008. In the fourth quarter of 2008, the Company accepted into the network, on a trial basis, another 350 existing, independently owned stores which will allow the Company to assess sales at each store and help it decide whether or not to make each store a Yongye branded store.

The Company expects its gross profit for fiscal year 2008 to be between $23-24 million, with an approximate 50%-51% gross margin, compared to $5.9 million with 44.6% gross margin in 2007. Gross margin increased mainly because of cost efficiencies resulting from economies of scale associated with increased production, and more stable product prices. Net income for fiscal year 2008 is expected to be in the range of $10 million to $11 million, with and approximate 23.0%-24% net margin, up from $4.4 million in 2007 which is a decrease in net margin from 33% in 2007.

"Yongye reached some significant milestones in 2008. Strong demand for our "Shengmingsu" products and rapid expansion of our sales network led to noteworthy revenue and profit growth," commented Mr. Zishen Wu, Chief Executive Officer of Yongye. "While overall economic growth in China is expected to slow in 2009, we believe, based on our experience and understanding of China's agricultural markets, that demand for our plant and animal nutrient products will continue to show strong growth. Our recently expanded production facilities and additional stores will ensure that we meet anticipated demand for our products in 2009. We are fully confident that we will achieve our 2009 make good targets of $66 million in revenue and $15.8 million in net income."

About Yongye Biotechnology International, Inc.

Yongye Biotechnology International, Inc., headquartered in Beijing, is engaged in the distribution and sales of fulvic acid based nutrients for plants and animals. The Company's patented and patent pending processes and proprietary formulas allow it to create products that increase crop yields and improve the health of livestock. Its sole operating subsidiary, Yongye Nongfeng Biotechnology Company, Ltd., is located in Inner Mongolia, People's Republic of China. The Company sells its products through distributors and directly to farmers located in ten provinces throughout China.

The Company does not own any of its branded stores. Yongye works with distributors to target existing, independent agricultural stores which it believe meets its national branding criteria and then enters into agreements with storeowners through which the Company provides training about its products to storeowners and a computer to each store which contains educational and promotional information about the use of its products. Before becoming a Yongye branded store, stores are often physically cleaned and upgraded to meet the Company's national standards. Once a store becomes a Yongye branded store, Yongye's name is prominently displayed in front of the store, and its products are featured as headline products throughout the store through the use of various visual identity items. Storeowners receive direct marketing and product support from Yongye's service professionals and the opportunity to sell a high quality nationally marketed product.

Safe Harbor Statement

This press release contains certain statements that may include "forward looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website ( ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

    For more information, please contact:

    Yongye Biotechnology International, Inc.
     Mr. Larry Gilmore
     VP of Corporate Strategy and Principal Financial Officer
     Phone: +86-8232-8866 x8880

    CCG Investor Relations, Inc.
     Mr. Crocker Coulson, President
     Phone: +1-646-213-1915 (New York)

SOURCE Yongye Biotechnology International, Inc.
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