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China Yingxia International, Inc. Announces Record Fourth Quarter and Year 2007 Results
Date:3/31/2008

o, the company's Chairwoman and CEO.

Ms. Jiao further added, "In the past year, we dramatically expanded our franchisee distribution network beyond the northeast and currently have over 1000 active franchisees throughout the country. We are extremely pleased to have increased to 391 active franchisees in the south central and east regions of the country at the end of 2007."

"We substantially diversified our product mix. Sales of nutritional foods, supplements, cosmetics, and personal care products grew 280% to $9.8 million from $2.6 million. They accounted for 61.7% of sales, up from 30.8% of sales in the previous year. The strong diversification of our product mix will offer us strong opportunities for balanced growth."

Fourth Quarter of 2007 Financial Results

For the fourth quarter ended December 31, 2007, sales grew 78.31% to $5.53 million, from $3.09 million recorded in same period of 2006.

Gross profit rose 89.74% to $2.76 million from $1.45 million in same period of 2006. The increase was a result of the expansion of our franchisee distribution network. Fourth-quarter 2007 gross margin was stable at 49.9% compared with 46.9% in 2006 same period.

Operating expenses decreased 23.6% to $1.39 million in the fourth quarter of 2007, from $1.82 million in same period 2006, primarily due to research and development costs, which accounted for approximately 26.8% of selling expenses in the fourth quarter of 2006.

General and administrative expenses increased to $1.54 million, from $1.33 million. In the fourth quarter of 2007, one-time expenses for issuance of stock to consultant and an allowance for doubtful accounts related to related party loans totaled $0.56 million. In the fourth quarter of 2006, a one time expense of $0.85 million was incurred for going public. Normalizing these items, general and administrative expenses increased 102.08% to $0.97 million from $0.48 million. This was primarily due to expenses related
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SOURCE China Yingxia International, Inc.
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