EYS' Q1 FY2009 Results - Unaudited Financial Statement And Dividend Announcement

Eu Yan Sang posted net profit of S$3.3 million in Q1 FY2009

Strong net cash flow from operations, up 330% to S$4.47 million

Singapore, 30th October 2008 – Mainboard listed Eu Yan Sang International Ltd ("EYS", "The Group" or "余仁生国际企业"), the largest Traditional Chinese Medicine ("TCM") group outside of China and a leading household brand for TCM and integrative healthcare services, has turned in a net profit of S$3.3 million for Q1 FY2009 ended 30 September 2008. This is despite Revenue for the quarter dipping by 3% to S$50.4 million.

Compared to the same period last year, Net cash flow arising from operations improved 330% to S$4.47 million while Gross margin remained relatively stable at 53.5%.

Mr. Richard Eu (余义明), Group CEO stated, "We have taken the necessary steps to exit from our non-core businesses and are now fully focused on expanding our core TCM business. Despite the inflationary pressure and slower economic growth, we managed to have an improvement over the previous quarter on several fronts, most notably our turnover, net profit and net cash flow."

Operations Review

Retail activities, the Group’s largest business segment, remained stable at our outlets. The Group’s flagship products, Bo Ying Compound, Bottled Bird's Nest and Bak Foong Pills continued to be our top three selling products. Revenue from Wholesale-TCM segment has decreased compared to the same quarter last year due to lower export to China. Clinics segment revenue decreased slightly due to lower sales contribution from our TCM specialist clinics despite a sales improvement in the general clinics.

Comparing by geographical locations, Malaysia performed very well by improving 16% in local currency terms in turnover. Singapore remained relatively flat while a small dip was experienced in Hong Kong. The Group now operates a total of 146 retail outlets and 23 TCM clinics including 3 specialist TCM clinics across the region.

Outlook

The slowdown in economies in the core countries in which we operate makes the business conditions more challenging for the Group in the next few quarters. The depressed consumer sentiment resulting from the global financial crisis is likely to have a downward pressure on sales. Nevertheless, the Group will strive towards improving same store sales by introducing new TCM and health food products, and increasing revenue from our clinics. Barring unforeseen circumstances, we expect FY2009 to remain profitable.

About Eu Yan Sang International Limited (SGX:EYSI)

Listed on the Singapore Exchange, Eu Yan Sang International Limited (Eu Yan Sang) is a progressive, global healthcare company with its core focus in Traditional Chinese Medicine (TCM).

The Group has come a long way from its humble beginnings offering TCM remedies to tin mine coolies in Gopeng, Perak, Malaysia 129 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.

Eu Yan Sang strives to broaden its appeal by monitoring changing consumer trends and needs, investing in new business ideas, engaging in research and development with strategic partnerships and expanding its distribution network.

The Group markets fine quality Chinese herbs, Chinese Proprietary Medicines as well as health foods and supplements. It currently 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. In December 2006, the company signed an exclusive worldwide distributorship agreement with the Wisconsin Ginseng & Herb Co-op.

Manufacturing activities are carried out in two of its GMP-certified (Good Manufacturing Practice) factories located in Hong Kong and Malaysia.

Eu Yan Sang has an extensive distribution network comprising more than 140 Eu Yan Sang branded retail outlets in Hong Kong, Macau, China, Malaysia, Singapore and Taiwan. Eu Yan Sang products are available in drugstores, pharmacies, medical halls, supermarkets, convenience stores, hospitals, health clubs and spas worldwide. Its cybershop at www.euyansang.com offers global customers the ease and convenience of shopping online. The Group also operates a chain of 23 TCM Clinics in Singapore, Malaysia and Hong Kong.

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