CHRI second quarter revenues increase to $8 million

China Health Resource, Inc. (OTCBB: CHRI), a producer and supplier of Traditional Chinese Medicine (TCM) products, announced robust quarterly earnings for June 2011. CHRI reported over $8 million in revenues and $1.7 million in net income, 443% increase from the second quarter of 2010. This translates to earnings of about $0.02 per share for the first half of 2011. The net earnings performance in the first half fiscal year has nearly matched the net profit for all of 2010.

CHRI's gross profit margin for the first half of 2011 is 32% and net profit margin of 21%, a significant increase compared to 18% of gross margin and 10% of net profit margin for the first half year of 2010.

"CHRI achieved excellent results in the second quarter," noted Jiayin Wang, CHRI's Chairman and Chief Executive Officer. "Orders in the quarter were up nearly 80% with an increased gross and net margin from 18% to 32% and 10% to 21%, respectively. This order strength translated into strong top-line performance and improved product margins which, coupled with a relatively well maintained low cost of operating structure, drove earnings significantly above our expectations", noted Mr. Wang.

"Several reasons contributed to the strong performance in net earnings for the first six months of 2011. First, there has been an increase in revenue from a higher volume of sales of raw Dahurian Angelica Root (DAR). In addition, CHRI has several other new products making strong headway including Rhizoma Gastrodiae, or "TianMa", through exclusive agreements with Chinese suppliers. Demand for these products has been steadily increasing and our brand and franchise is becoming recognized throughout the industry. We expect this growth in sales and earnings to continue", commented Mr. Wang.

CHRI as the only provider of Dahurian Angelica Root (DAR) with a nationally certified standard (GAP) in the People's Republic of China and is committed to setting pharmaceutical grade standards for TCM herbs in its industry, a process the company started in collaboration with top TCM research institutions in China.

"Buyers of our products value the high quality standards that CHRI employs. We look forward to expansion through both continued sales of our existing lines and introduction of new products consistent with our recognized quality standards", added Mr. Wang.