EU YAN SANG INTERNATIONAL LTD
269A South Bridge Road, Singapore 058818
Tel: (65) 6225 3211
Fax: (65) 6225 8276

For immediate release

Eu Yan Sang’s net profit increases 11% to S$3.5 million in Q2 FY2009

• Q2 FY2009 revenue improves 6% to S$53.4 million
• Strong net cash flow from operations, up 35% to S$7.4 million
• Well-positioned and taking active steps to face economic challenges

Singapore and Hong Kong, 12th February 2009 – 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 leader in adopting a scientific approach in the production of TCM products, reported an increase of 11% in net profit to S$3.5 million for Q2 FY2009 ended 31 December 2008 on the back of an increase of 6% in revenue for the quarter to S$53.4 million.

Compared to the same quarter last year, net cash flow arising from operations improved a commendable 35% to S$7.4 million; whereas comparing by first six months, it improved by a whopping 235% to S$11.8 million. Gross margin has remained relatively stable at 52%.

Mr Richard Eu (余义明), Group CEO commented, “Our decision to exit from non-core businesses and to focus on our core TCM business is showing encouraging results. We have improved our balance sheet and cash flow, which are important performance indicators for companies during the current financial turmoil.”

Operations Review

The second quarter’s retail revenue in the current year posted S$42 million, an increase of 11% over the same period last year. Bottled Bird’s Nest, Bo Ying Compound and Bak Foong Pills, the Group’s flagship products, continued to be the top three selling products. Wholesale revenue decreased 19% to S$7.3 million due to lower exports to China, pending license renewal. The Group opened a new integrative medical centre in Hong Kong, the first EYS clinic in the SAR, in the second quarter. Revenue from clinics increased by 12% to S$3.6 million.

Geographically, for the second quarter, sales in Malaysia surged 28% in local currency terms, while sales in Singapore increased 8%. In Hong Kong, retail sales increased by 4% in local currency terms, however, because of the lower exports to China, overall sales in Hong Kong reported a dip of 3%.

Mr Eu added, “Despite the competitive environment in Hong Kong, retail sales continued to grow. With our export license to China having been approved in February 2009, we expect contribution from export sales to China in the fourth quarter.”

In the second quarter alone, the Group added another six retail outlets to bring the total to 152. With the two outlets opened in the first quarter, this brings to eight that the Group has added so far this year.

Outlook

The business environment will become more challenging in the financial tsunami that is sweeping the whole world over. The economic slowdown in the countries in which the Group operates will no doubt dampen consumer sentiment. Nonetheless, the economic stimulus packages from the governments and other support schemes, like the Jobs Credit scheme in Singapore will bring some respite.

In conclusion, Mr Eu said, “Despite the present global economic slowdown, we are wellpositioned and are taking active steps to improve sales. Our investments in a modern scientific approach towards TCM will provide us the pipeline to introduce new TCM and health food products and services. Barring unforeseen circumstances, we expect FY2009 to be profitable.”

About Eu Yan Sang International Limited (SGX:EYSI)

Listed on the Singapore Exchange, Eu Yan Sang International Limited (Eu Yan Sang) is the largest Traditional Chinese Medicine (TCM) group outside of China 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.

The Group has developed a 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 in the process of growing, processing and retailing of TCM herbs. The Group 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).

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. 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 150 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 20 TCM Clinics (as of February 2009) in Singapore and Malaysia, and one integrative medical centre in Hong Kong.