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Winner Medical Reports First Quarter of Fiscal 2012 Results
Date:2/9/2012

any ordered two new PurCotton® jumbo roll manufacturing lines. The sanitary napkin manufacturing line started trial production at the end of October 2011 and is currently running at approximately 50% of expected capacity, which is in line with management's expectation. In addition, two PurCotton baby diaper manufacturing lines have been installed and are expected to start trial production in February 2012. In January 2011, the Company established Winner (Huanggang) Cotton Processing, Co. Ltd. to process seed cotton. The Company expects that self-processing seed cotton will allow for more stringent quality control and reduced raw material costs, contributing to both the revenue and net income. This cotton processing line is currently meeting approximately 30% of the Company's annual cotton production needs.

PurCotton Retail BusinessAs of February 9, 2012, Winner Medical owned and operated 43 PurCotton® branded retail stores, with 25 in the south of China, seven in Beijing, eight in Shanghai and three in Hong Kong, after having recently opened three new stores in Shenzhen and two in Shanghai. From December 1, 2011 to February 9, 2012, one store in Guangzhou and three in Beijing were closed due to low traffic or expiration of lease agreements, with all four stores having been opened in the initial stage of operating the retail business. Sales generated by the retail business have been rapidly increasing, and the majority of PurCotton chain stores in the south of China (which were opened more than one year ago) have gradually turned a profit. Stores in Beijing and Shanghai are changing locations to adjust the size of stores previously opened. These stores were opened in the initial stage of launching the retail brand and there was a lack of brand recognition in those cities at that time, and the Company is relocating and resizing these stores to better fit local demand. As the PurCotton brand gains market recognition, the Company expects that
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SOURCE Winner Medical Group Inc.
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