For Immediate Release

Eu Yan Sang’s 1Q2010 net profit improves 11%to S$3.6 million

• 1Q2010 revenue up 5% to S$53.1 million
• 1Q2010 net cash from operations doubles to S$8.8 million

Singapore, 29th Oct 2009 – SGX mainboard-listed Eu Yan Sang International Ltd (“EYS”, “the Group” or “余仁生国际企业”), a progressive healthcare company with a strong foundation in Traditional Chinese Medicine (TCM), recorded a net profit of S$3.6 million for 1Q2010 ended 30 September 2009, an increase of 11% on-year.

^: Calculated on fully diluted basis.

The higher net profit came on the back of a 5% increase in revenue to S$53.1 million for 1Q2010. Gross profit margin however, dipped about one percent from 54% in 1Q2009 to 53% in 1Q2010, mainly due to product sales mix. Regardless, operating profit improved 9% to S$5.1 million.

Mr Richard Eu (余义明), Group CEO commented, “We are pleased to continue our good performance, following our record results in FY2009. The improvement in both the revenue and net profit in 1Q2010 augurs well for another successful financial year.”

The Group doubled its net cash from operating activities from S$4.5 million in 1Q2009 to S$8.8 million in 1Q2010 attributable to better management of inventories, trade receivables and payables. The higher net cash from operating activities also boosted the Group’s cash-on-hand to S$30.4 million as at end-1Q2010, an increase of S$5.0 million from S$25.4 million as at end-FY2009.

Operations Review

Retail revenue improved 3% in 1Q2010 to S$41.4 million and remained the largest business segment, indicating a strong resilience in the Group’s business model and established brand. The Group’s flagship products, Bo Ying Compound, Bottled Bird’s Nest and Bak Foong Pills, continued to be the top three selling products. The resumption of exports to China after the license renewal issue was resolved in 4Q2009 helped improve Wholesale revenue by 22% to S$7.9 million. Clinic revenue gained 2% to S$3.5 million brought about mainly by the revenue contribution of the integrative medical centre in Hong Kong.

In geographical and local currency terms, Hong Kong posted an 18% increase in revenue, while Singapore returned with a gain of 3%. Owing to the timing difference of the Anniversary sales, Malaysia experienced a decline of 14% in revenue; the Anniversary sales were held in 1Q2009 but for FY2010, it will be held in the second quarter.

The Group continued its expansion of its retail network with an increase of 1 outlet during the quarter to 155. Besides expansion in its retail network in its existing markets, the Group also plans to venture into new geographical markets and developing sub-brands. It is collaborating with a Vietnamese company, Truong Xuan Viet Company Limited, to open a chain of TCM clinics in Vietnam with the first clinic likely to open within 12 months. The Group has introduced Yen, a range of lifestyle products based on bird’s nest targeting younger consumers, and HoneyMart, a range of honey products.

Outlook

Mr Eu concluded, “With recent economic indicators suggesting that the recession has bottomed out, we hope to ride the rising waves when the economy turns around and return with even better results. In terms of our strategic direction, we have embarked on an integrative approach to consumer healthcare by introducing organic food and ready-to-drink products, to name a few.”

About Eu Yan Sang International Limited (SGX:EYSI)

Listed on the Singapore Exchange, Eu Yan Sang International Limited (Eu Yan Sang) is a progressive healthcare company with its core focus in Traditional Chinese Medicine (TCM) and integrative healthcare. It is one of the largest TCM groups in South East Asia and a leader in adopting a scientific approach in the production of TCM products.

The Group has come a long way from its humble beginnings offering TCM remedies to tin mine coolies in Gopeng, Perak, Malaysia 130 years ago. Today, Eu Yan Sang is a household name in Asia with an unrivalled reputation as the leader in the TCM industry.

Eu Yan Sang’s ability to control the total supply chain – from the sourcing of its raw materials to the production and distribution of its products and the provision of treatments gives the Group an excellent competitive edge in the industry.

To give an added assurance to consumers, the Group developed the world’s first certification standard for TCM herbs, called the “Eu Yan Sang Good Agronomic Practices for Herbs (EYSGAP-Herbs) Certification”. This certification ensures world-leading standards are maintained at all stages of growing, processing and retailing of TCM herbs.

Eu Yan Sang is also developing a world first integrated online portal to keep track of TCM herbs throughout the whole value chain, known as “integrated Good Agronomic Practice for Traditional Chinese Medicine Electronic System” (iGATES).

Apart from retailing fine quality Chinese herbs and Chinese Proprietary Medicines, Eu Yan Sang also retails health foods and supplements. Currently, the Group offers more than 300 products under the Eu Yan Sang brand name and over 1,000 different types of Chinese herbs and other medicinal products. Manufacturing activities are carried out in two of its GMP-certified (Good Manufacturing Practice) factories located in Hong Kong and Malaysia.

As of 30 September 2009, Eu Yan Sang has an extensive distribution network comprising more than 150 retail outlets in China, Hong Kong, Macau, Malaysia and Singapore. Its products are available in drugstores, pharmacies, medical halls, supermarkets, convenience stores, hospitals, health clubs and spas worldwide. Its online store at www.euyansang.com offers global customers the ease and convenience of shopping online. The Group also operates a chain of 20 TCM Clinics in Singapore and Malaysia, and one Integrative Medical Centre in Hong Kong.

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