[b]Jinzanghuang Tibet Pharmaceuticals, Inc Announced thatThey Generated $3.72 million in Financial Year 2011[/b]
Leling, Shandong, China, Oct.10, 2011 – Jinzanghuang Tibet Pharmaceuticals, Inc (JZHG.OB)(the “Jinzanghuang”), a pharmaceutical sales company specializing in the sales of Tibetan pharmaceutical and health products produced by Shandong Jinzanghuang Tibet Pharmaceuticals Group Co., Ltd (the “Shandong Jinzanghuang”), and provide training services to a number of sauna stores to teach them how to offer health care services in Tibetan pharmaceutical produced by Shandong Jinzanghuang. Jinzanghuang announced that their revenues ended June 30, 2011 has reached $3,716,529, increased by 479%, compared to 2010, the net income increased by 2850% to $1,865,988.

Financial highlights for the financial year ended June 30, 2011
• Annual growth of the revenue is 479%, raised from $0.64 million to $3.72million;
• The gross margin increased by 1581%, to $ 3million; the rate of margin was raised from 28% to 81%;
• Compared with 2010, the net income increased by 2850%, to $1.87million;
• For 4066 shares of outstanding shares, the revenue is $0.05/ per share;
• Cash and cash equivalents is $2.18 million in total;
• Working capital is $2.61 million in total.

Operation highlights for the financial year ended June 30, 2011
• As of Oct, 2011, cooperated with Shandong Jinzanghuang, engaged in the distribution of the Tibetan pharmaceutical and health products produced by Shandong Jinzanghuang. For the first quarter in the financial year 2011, the amount of sales reach to $27,219, and made a loss of $24，572..

• Since Oct, 2011, entered into a cooperative operating agreement with Shenyang Jintao Technology Co., Ltd(the “Jintao”), to provide services for the sauna stores that bought sauna health care products from Shandong Jinzanghuang. Jintao has approximately 1,000 of subordinate sauna stores within the nation. Under the agreement, Jintao introduce sauna stores to Jinzanghuang for direct distribution of the Tibetan pharmaceutical products made by Shandong Jinzanghuang, Jinzanghuang provide trainings on the usage of the Tibetan pharmaceutical products made by Shandong Jinzanghuang, and collect 40% to 35% of the total fees of selling the Tibetan pharmaceutical products made by Shandong Jinzanghang as commission, according to the different locations of sauna stores.

• As of June 30, 2011, through the introduction by Jintao, Jinzanghuang has provided training and consulting services for totally 150 of sauna stores, in which they direct the sauna store to offer sauna service by using the products made by Shandong Jinzanghuang. In the financial year 2011, Jinzanghuang generated $3.69 million of sales commission through recommending Tibetan pharmaceutical products to sauna stores, and providing trainings of the Tibetan pharmaceutical products’ usage, helping sauna stores to resale the products to consumers.

Mr. Xue Bangyi, the Chief Executive Officer of Jinzanghuag Tibet Pharmaceutical Inc, commented,” since Oct, 2011, Jinzanghuang has started to cooperate with sauna stores to provide trainings of the Tibetan pharmaceutical products’ usage. Our company has cooperated with 150 of sauna stores. In the financial year of 2011, our revenues was consist of the revenue generated from the sales of Tibetan pharmaceutical and nourishment made by Shandong Jinzanghuang, and the service fees paid by sauna stores. The total revenue of the financial year ended in June.30, 2011 is $3,716,529, compared with $642,158 in the financial year ended in June.30, 2010, it has increased by 479%, or $3,074,371. Recently, we’re developing another 7kinds of Tibetan pharmaceutical products, which may increase the product category of the company, improve the sales performance. We’ll keep trying to find other opportunities of this kind, to make a contribution for the development of our company. ”

Mr. xue also stated, “ From July 1, 2010 to June.30, 2o11, the sales revenue of Tibetan pharmaceutical products and health care products has reduced from $642,158 to $27,219, or 96%. The main reason is that, we have started to provide services to sauna stores since the second quarter of this financial year. And we generated $3,689,310 of service fees from sauna stores. We intend to cooperate with more sauna stores in the next year, to expand the distribution channel, and try to gain 5million to 10million of income, and the revenue from which may be used for executing our direct selling, to realize the clinical trial and promotion of pharmaceuticals and health care products which are produced with the existing production line, and guarantee the market share of the company’s subsidiary. ”
The financial performance for the 12 months ended June. 30, 2011
Annual Financial Situation(USD)
12 months ended June 30th 2011 2010 change
Revenue $3.72 million $0.64 million +478.76%
Gross margin $2.996 million $0.178 million +96.5%
Rate of margin 80.62% 27.75% +52.87%
Net income $1.87 million -$68 thousand +2850%
Basic EPS $0.05 $0.00 +5%
 Based on 4066 shares of outstanding shares for both financial years of 2011 and 2010.

The financial performance for the financial year ended June 30, 2011
For the financial year ended June 30, 2011, the total revenue is $3.72 million, which has increased by 479%, compared with the $0.64 million of the financial year 2010. The revenue is mainly generated from the sales of Tibetan pharmaceutical products and health care products produced by Shandong Jinzanghuang, and the service fees paid by sauna stores. The annual revenue is increased by the commissions paid by sauna stores, for which the Jinzanghuang provided training services to sauna stores, directed sauna stores’ employees to use the products made by Shandong Jinzanghuang in sauna services, and resell the products to consumers. Depending on different locations of sauna stores, Jinzanghuang will gain a commission of 35% to 40%. As of June 30, 2011, Jinzanghuang has provided services for 150 of sauna stores for this financial year. Financial year 2011, Jinzanghuang generated $3.69 million of commission through recommending Tibetan pharmaceutical products to sauna stores, and providing trainings of Tibetan pharmaceutical products’ usage.

As of Oct, 2010, the company only generated revenues from the sales of Tibetan pharmaceutical and health care products. As the newly introduced source of revenue since Oct 8, 2011, our revenue consists of the incomes generated from the sales of Tibetan pharmaceutical and nourishment made by Shandong Jinzanghuang, and the service fees paid by sauna stores. The financial year as of June 30, 2011, our total revenue is $3,716,529, which has increased by 479%, or $3,074,371, compared with $642,158 of the financial year ended June 30, 2010. From June.30, 2010 to June.30, 2o11, the sales revenue of Tibetan pharmaceutical products and health care products has reduced from $642,158 to $27,219, or 96%. The main reason is that, we have started to provide services to sauna stores since the second quarter of this financial year, however, the company generated $3,689,310 of service fees from sauna stores.
For the financial year ended June 30, 2010, the selling cost was $0.464 million in total, is 72.2% of the income, and for the financial year ended June 30, 2011, the selling cost was$0.72 million, is 19.38% of the income, which has reduced by 52.8%.
Jinzanghuang Tibet Pharmaceutical Inc.